Answered step by step
Verified Expert Solution
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
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
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started