DataPoint Engineering is considering the purchase of a new plece of equipment for $220,000. It has an eight-year midpoint of its asset depreciation range (ADR), It will require an additional initial investment of $120,000 in nondepreciable working capital. $30,000 of this Investment will be recovered after the sixth year and will provide additional cash flow for that year. Income beford depreciation and taxes for the next six are shown in the following table. Use Joble 12-11. Table 12-12. Use Appendix. 8 for an approximate answer but calculate your final answer using the formula and financial calculator methods. The ax rote is 25 percent. The cost of copital must be computed based on the following: c. What is the tax benefit from the sale? (Do not round intermediate calculations and round your answer to the nearest whole dollar.) d. What is the cash inflow from the sale of the old 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 inflow from the sale of the old equipment) (Do not round intermediate calculations and round your answer to the nearest whole dollac.) f. Determine the depreciation schedule for the new equipment. (Round the depreciation base and annual depreciation answers to the nearest whole dollar. Round the percentage depreciation factors to 3 decimal places.) 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.) DataPoint Engineering is considering the purchase of a new plece of equipment for $220,000. It has an eight-year midpoint of its asset depreciation range (ADR), It will require an additional initial investment of $120,000 in nondepreciable working capital. $30,000 of this Investment will be recovered after the sixth year and will provide additional cash flow for that year. Income beford depreciation and taxes for the next six are shown in the following table. Use Joble 12-11. Table 12-12. Use Appendix. 8 for an approximate answer but calculate your final answer using the formula and financial calculator methods. The ax rote is 25 percent. The cost of copital must be computed based on the following: c. What is the tax benefit from the sale? (Do not round intermediate calculations and round your answer to the nearest whole dollar.) d. What is the cash inflow from the sale of the old 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 inflow from the sale of the old equipment) (Do not round intermediate calculations and round your answer to the nearest whole dollac.) f. Determine the depreciation schedule for the new equipment. (Round the depreciation base and annual depreciation answers to the nearest whole dollar. Round the percentage depreciation factors to 3 decimal places.) 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.)
