Hercules Exercise Equipment Co. purchased a computerized measuring device two years ago for $88,000. The equipment falls into the five-year category for MACRS depreciation and can currently be sold for $39,800. A new piece of equipment will cost $155,000. It also falls into the five year category for MACRS depreciation. Assume the new equipment would provide the following stream of added cost savings for the next six years. Use Table 12-12. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. Year 1 2 3 Cash Savings $ 66,000 56,000 54,000 52,000 49,000 38,000 5 The firm's tax rate is 25 percent and the cost of capital is 12 percent Women Donal . www HE JAR. We come of the new pude the flow from the sideupe De notron intermediate calculations and round your answer to the rest whole da Determine the depreciation schedule for the new equipment Round the depreciation base anarul depreciation answers to the rest whole della Round the percentage depreciation factors to 3 decimal aces Deco Percentage Depreciation Depreciation 1 1 1 TI . . Determine the depreciation schedule for the remaining yer of the old get out the depreciation base and annual depreciation anwers to the nearest whole dota. Round the percentage depreciation factors to 3 decimal places! Www Design Annual Decor . RE n. Determine the centre depreciation between the old and new count and the red tax better the taste decimal munded to decimal places. Hound all that was to the real wholedo) Der + 2 3 Compute the state benefits of the cost savings (Enter the aftertou facter as decimal rounded to 2 decimal places. Sound alt other answers to the nearest whole dollar) Your Devings 11- The Art Being . 10.000 2 S. a 54000 4 2.000 5 DO . 000 M. Ada e depreciation tax shield benefits and the aftertax cost savings to determine the total annuel benesta (Do not round Intermediate calculation and round your answers to the nearest whole dolar) har Banos from Marta Cut TA Deprecat 2 . . 12. Compute the present stue of the total benefits. Do not reund Intermediate calculations and round your answer to the nearest whole della Compare there we of the incremental benutts to the recost of the weten we not found intermediate calculations. Negative amount should be indicated by a minus in hund your answer to rest whole dolar 2. Should the replacement be undertekent NO Hercules Exercise Equipment Co. purchased a computerized measuring device two years ago for $88,000. The equipment falls into the five-year category for MACRS depreciation and can currently be sold for $39,800. A new piece of equipment will cost $155,000. It also falls into the five year category for MACRS depreciation. Assume the new equipment would provide the following stream of added cost savings for the next six years. Use Table 12-12. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. Year 1 2 3 Cash Savings $ 66,000 56,000 54,000 52,000 49,000 38,000 5 The firm's tax rate is 25 percent and the cost of capital is 12 percent Women Donal . www HE JAR. We come of the new pude the flow from the sideupe De notron intermediate calculations and round your answer to the rest whole da Determine the depreciation schedule for the new equipment Round the depreciation base anarul depreciation answers to the rest whole della Round the percentage depreciation factors to 3 decimal aces Deco Percentage Depreciation Depreciation 1 1 1 TI . . Determine the depreciation schedule for the remaining yer of the old get out the depreciation base and annual depreciation anwers to the nearest whole dota. Round the percentage depreciation factors to 3 decimal places! Www Design Annual Decor . RE n. Determine the centre depreciation between the old and new count and the red tax better the taste decimal munded to decimal places. Hound all that was to the real wholedo) Der + 2 3 Compute the state benefits of the cost savings (Enter the aftertou facter as decimal rounded to 2 decimal places. Sound alt other answers to the nearest whole dollar) Your Devings 11- The Art Being . 10.000 2 S. a 54000 4 2.000 5 DO . 000 M. Ada e depreciation tax shield benefits and the aftertax cost savings to determine the total annuel benesta (Do not round Intermediate calculation and round your answers to the nearest whole dolar) har Banos from Marta Cut TA Deprecat 2 . . 12. Compute the present stue of the total benefits. Do not reund Intermediate calculations and round your answer to the nearest whole della Compare there we of the incremental benutts to the recost of the weten we not found intermediate calculations. Negative amount should be indicated by a minus in hund your answer to rest whole dolar 2. Should the replacement be undertekent NO
