Calculation: 100%, (10% each question Write down your answers in the book. You have to show me your work toget ABC Engines, Ine must develop there . Calculate the numbers based on the information provided below Bows for a replacement capital investment project that will take place at the beginning of 2020. The prop o s 600.000 ha costs of $30,000. This is a 5-year project from 2000 to 2034. The seo b depreciated using a tv-year recovery schedule and will be sold at the end of 2004 (the year for S300,000. The existing equipment, which originally cost $350,000 when it was surchased at the beginning of 2017 and will be sold for $200.000 now or $50,000 at the end of 2034 (the car has been deprecated using an MACRS five-year recurry schedule and three years of depreciation (2017, 2018, and 2019) has already been taken The new equipment is required to invest $25.000 net working capital at the beginning and the $25.000 networking capital will be resowered by the end 2024 Earnings before depreciation and taxes for the existing equipment is $140,000 per year in 2020 to 2024 and earnings before depreciation and taxes for the proposed new equipment is $230,000 DE year for 5 years from 2020 to 2024 The firm's weighted average cost of capital is 10% The firm has a 40 percent tax rate 1. What is the after-tax cash flow on the sale of the existing asset? 2. How much is the initial investment if the company decides to replace the existing equipment with the proposed equipment? 3. Compute the annual depreciation expenses for both existing equipment and proposed equipment from 2020 to year 2024 respectively. 4. Compute the annual operating cash flows for the existing equipment from year 2020 to year 2024 respectively. (Show your work with the operating cash flows table that presented to you in class). 5. Compute the annual operating cash flows for the proposed new equipment from year 2020 to year 2024 respectively. (Show your work with the operating cash flows table that I presented to you in class). 6. Compute the annual incremental after-tax cash flow from stations for year 2020 to 2024. 7. What is the after-tax cash flow on the sale of the existing equipment at the end of 2024? 8. What is the after-tax cash flow on the sale of the proposed equipment at the end of 2024? 9. What is the terminal cash flow of this project? 10. Compute the NPV of this proposed project and determine if the company should accept the project? Calculation: 100%, (10% each question Write down your answers in the book. You have to show me your work toget ABC Engines, Ine must develop there . Calculate the numbers based on the information provided below Bows for a replacement capital investment project that will take place at the beginning of 2020. The prop o s 600.000 ha costs of $30,000. This is a 5-year project from 2000 to 2034. The seo b depreciated using a tv-year recovery schedule and will be sold at the end of 2004 (the year for S300,000. The existing equipment, which originally cost $350,000 when it was surchased at the beginning of 2017 and will be sold for $200.000 now or $50,000 at the end of 2034 (the car has been deprecated using an MACRS five-year recurry schedule and three years of depreciation (2017, 2018, and 2019) has already been taken The new equipment is required to invest $25.000 net working capital at the beginning and the $25.000 networking capital will be resowered by the end 2024 Earnings before depreciation and taxes for the existing equipment is $140,000 per year in 2020 to 2024 and earnings before depreciation and taxes for the proposed new equipment is $230,000 DE year for 5 years from 2020 to 2024 The firm's weighted average cost of capital is 10% The firm has a 40 percent tax rate 1. What is the after-tax cash flow on the sale of the existing asset? 2. How much is the initial investment if the company decides to replace the existing equipment with the proposed equipment? 3. Compute the annual depreciation expenses for both existing equipment and proposed equipment from 2020 to year 2024 respectively. 4. Compute the annual operating cash flows for the existing equipment from year 2020 to year 2024 respectively. (Show your work with the operating cash flows table that presented to you in class). 5. Compute the annual operating cash flows for the proposed new equipment from year 2020 to year 2024 respectively. (Show your work with the operating cash flows table that I presented to you in class). 6. Compute the annual incremental after-tax cash flow from stations for year 2020 to 2024. 7. What is the after-tax cash flow on the sale of the existing equipment at the end of 2024? 8. What is the after-tax cash flow on the sale of the proposed equipment at the end of 2024? 9. What is the terminal cash flow of this project? 10. Compute the NPV of this proposed project and determine if the company should accept the project
