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Can you help? fHercules Exercise Equipment Co. purchased a computerized measuring device two years ago for $84,000. The equipment falls into the veyear category for
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\fHercules Exercise Equipment Co. purchased a computerized measuring device two years ago for $84,000. The equipment falls into the veyear category for MACRS depreciation and can currently be sold for $37,800. A new piece of equipment will cost $205,000. It also falls into the veyear category for MACRS depreciation. Assume the new equipment would provide the following stream of added cost savings for the next six years. Use Table 1212. Use appendix B for an approximate answer but calculate your nal answer using the formula and nancial calculator methods. Cash Savings 1 $ 54,390 2 54,\" 3 52,099 4 53,030 5 5 Year 47,690 BEJGGIO [ The rm's tax rate is 25 percent and the cost of capital is 10 percent a. What is the book value of the old equipment? {Do not round intermediate calculations and round your answer to the nearest whole dollar.) b. What is the tax loss on the sale of the old equipment? {Do not round intermediate calculations and round your answer to the nearest Iwhole dollar.) c. What is the tax benet from the safe? [Do not round intermediate calculations and round your answer to the nearest Iwhole dollar.) Tax bee- _ d. What is the cash inflow from the sale of the aid equipment? [Do not round intermediate calculations and round your answer to the nearest whole dollar.) _ e. What is the net cost of the new equipment? (Include the inow from the sale of the old equipment} {Do not round intermediate calculations and round your answer to the nearest whole dollar.) Depreciation Percentage Annual _ Base Depreciation Depreciation 9. Determine the depreciation schedule for the remaining years of the old equipment. {Round the depreciation base and annual depreciation answers to the nearest whole dollar. Round the percentage depreciation factors to 3 decimal places.) Depreciation Percentage Annual Base Depreciation DepreciationStep by Step Solution
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