Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Calculating initial investment DuPree Coffee Roasters, Inc., wishes to expand and modernize its facilities. The installed cost of a proposed computer-controlled automatic-feed roaster will be

image text in transcribed

Calculating initial investment DuPree Coffee Roasters, Inc., wishes to expand and modernize its facilities. The installed cost of a proposed computer-controlled automatic-feed roaster will be $124,000. The firm has a chance to sell its 3-year-old roaster for $34,500. The existing roaster originally cost $59,200 and was being depreciated straight-line over 7 years. DuPree pays taxes at a rate of 40%. a. What is the book value of the existing roaster? b. Calculate the after-tax proceeds of the sale of the existing roaster. c. Calculate the change in net working capital using the following figures: Anticipated Changes in Current Assets and Current Liabilities Accruals - $20,000 Inventory + 49,200 Accounts payable + 40,600 Accounts receivable + 70,300 Cash 0 Notes payable + 15,300 a. The remaining book value of the existing roaster is $ 25456. (Round to the nearest dollar.) b. The after-tax proceeds of the sale of the existing roaster will be $30882. (Round to the nearest dollar.) C. The change in net working capital will be $58500). (Round to the nearest dollar.) d. The initial investment associated with the proposed new roaster will be $ 151618. (Round to the nearest dollar.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial And Managerial Accounting

Authors: Nonso E Okpala

1st Edition

1634873904, 9781634873901

More Books

Students also viewed these Finance questions

Question

1. Give occasional take-home tests.

Answered: 1 week ago

Question

=+a. Does it flow? (Can anyone read it out loud without stumbling?)

Answered: 1 week ago

Question

=+e. Does it use simple language, not technical jargon?

Answered: 1 week ago