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 automatis teed roaster will

image text in transcribed
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 automatis teed roaster will be $140.000. The firm has a chance to sell its 5-year-old roster for $35,500. The existing roaster originally cost 550,300 and was being deprecated using MACRS and a 7-year recovery period (see the table | DuPro is subject to a 40% tax rate a. What is the book value of the existing roaster? b. Calculate the after-tax proceeds of the sale of the existing roaster Data Table c. Calculate the change in networking capital using the following figures Anticipated Changes in Current Assets and Current Liabilities (Click on the loon located on the top right corner of the data table below in order to copy its contents into a Accruals - $20,500 spreadsheet) Inventory +49,900 Accounts payable + 39,800 Rounded Depreciation Percentages by Recovery Year Using MACRS for Accounts receivable +70,700 First Four Property Classes Percentage by recovery year 2. The remaining book value of the existing roaster is $. (Round to the Recovery year 3 years 5 years 7 years 10 years 1 33% 20% 14% 10% 2 45% 32% 25% 18% 3 15% 19% 14% 4 7% 12% 12% 12% 5 12% 9% 9% 6 5% 9% 8% 7 9% 7% 8 6% 9 6% 10 11 Enter your answer in the answer box and then click Check Answer Totals 100% 100% 100% 100% plity calculations while MyUUIU. 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 - $20,500 Inventory + 49,900 Accounts payable + 39,800 Accounts receivable + 70,700 Cash 0 Notes payable + 14,700 d. Calculate the initial investment associated with the proposed new roaster

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

Python For Finance

Authors: Yves Hilpisch

2nd Edition

1492024333, 978-1492024330

More Books

Students also viewed these Finance questions