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f . Determine the depreciation schedule for the new equipment. Note: Round the depreciation base and annual depreciation answers to the nearest whole dollar. Round
f Determine the depreciation schedule for the new equipment.
Note: Round the depreciation base and annual depreciation answers to the nearest whole dollar. Round the percentage
depreciation factors to decimal places.
Answer is not complete. g Determine the depreciation schedule for the remaining years of the old equipment.
Note: Round the depreciation base and annual depreciation answers to the nearest whole dollar. Round the percentage
depreciation factors to decimal places.
Answer is not complete. h Determine the incremental depreciation between the old and new equipment and the related tax shield benefits.
Note: Enter the tax rate as a decimal rounded to decimal places. Round all other answers to the nearest whole dollar.
Answer is not complete.
i Compute the aftertax benefits of the cost savings.
Note: Enter the aftertax factor as a decimal rounded to decimal places. Round all other answers to the nearest whole dollar.Hercules Exercise Equipment Company purchased a computerized measuring device two years ago for $ The equipment falls
into the fiveyear category for MACRS depreciation and can currently be sold for $ A new piece of equipment will cost
$ It also falls into the fiveyear category for MACRS depreciation. Assume the new equipment would provide the following
stream of added cost savings for the next six years. Use Table Use Appendix B for an approximate answer but calculate your
final answer using the formula and financial calculator methods.
The firm's tax rate is percent and the cost of capital is percent.
f Determine the depreciation schedule for the new equipment.
Note: Round the depreciation base and annual depreciation answers to the nearest whole dollar. Round the percentage depreciation factors to decimal places.
g Determine the depreciation schedule for the remaining years of the old equipment.
Note: Round the depreciation base and annual depreciation answers to the nearest whole dollar. Round the percentage depreciation factors to decimal places.
h Determine the incremental depreciation between the old and new equipment and the related tax shield benefits.
Note: Enter the tax rate as a decimal rounded to decimal places. Round all other answers to the nearest whole dollar.
i Compute the aftertax benefits of the cost savings.
Note: Enter the aftertax factor as a decimal rounded to decimal places. Round all other answers to the nearest whole dollar.
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