integrativo Determining event cash flows Lombard Company in contemplating the purchase of a new high speed wildcat prinder to replace the exhing grinder The enting grinder wat purchased 2 years ago at an installed cost / 564.700, ik was being would be depreciated under MACRS in a year recovery period Lonband can cumanity alleving grinder for 30 de Whout curing any removal or cheap costs. To wpport the increased business resulting from purchase of the new grinder counts receivable would increase by 8.500 metres by 529.700, and accounts payable by 558500 At the end of years, the vingrinder would have a market value of zero the new grinder would be sold to net 520 200 after removal and cleanup costs and before. The subject 40% taxe. The stated earnings before depreciation werest and won over the years for bon the new and the existing prinde are shown in the following table alle contains the applicable MACRS pred perc) a. Calculate the name associated with the replacement of the existing grinder by the wa b. Demine the range os soduled with the presedintreplacement Nole Bewure to consider the depreciation in your 6 ) c. Determine the wmn cah fowereded at the end of yow from the proposed grind replacement d. Depict on a time in the east cash fowe wcaled with the proposed grinder placement decision Calculate the investment asiated with replacement of the machine by the new one Calore the winnebulow. Round to the rest olar) Cost of new asset Installations Proceso 5 Toronto Total proceeds sale of old Change in working Din telerating cushows with the presente consider the pain you Calculate the machine below and thered) Integrative-Determining relevant cash flows Lombard Company is contemplating the purchase of a new high-speed widget grinder to replace the existing grin depreciated under MACRS using a 5-year recovery period. The existing grinder is expected to have a usable life of 5 more years. The new grinder costs $109,000 would be depreciated under MACRS using a 5-year recovery period. Lombard can currently sell the existing grinder for $69,000 without incurring any removal or cle accounts receivable would increase by $39,500 inventories by $29,700, and accounts payable by $58,500. At the end of 5 years, the existing grinder would have a costs and before taxes. The firm is subject a 40% tax rate. The estimated earnings before depreciation, interest, and taxes over tho 5 years for both the new and the MACRS depreciation percentages.) a. Calculate the initial investment associated with the replacement of the existing grinder by the new one b. Determine the operating cash inflows associated with the proposed grinder replacement (Note: Be sure to consider the depreciation in year 6.) c. Determine the terminal cash flow expected at the end of year 5 from the proposed grinder replacement d. Depict on a timeline the relevant cash flows associated with the proposed grinder replacement decision b. Determine the incremental operating cash inflows associated with the proposed replacement. (Note: Be sure to consider the depreciation in year 6) Calculate the cash flows with the old machine below (Round to the nearest dollar) 1 $ Year Profit before depreciation and taxes Depreciation Net profit before taxes Taxos $ $ Net profit after taxes $ $ Operating cash inflows (Round to the nearest dollar) 2 Year Profit before depreciation and taxes Enter any number in the edit fields and then continue to the next question Year 2 $ $ Profit before depreciation and taxes Depreciation Net profit before taxes Taxes Net profit after taxes Operating cash inflows (Round to the nearest dollar) $ $ $ 3 Year Profit before depreciation and taxes Depreciation Net profit before taxes $ S $ Enter any number in the edit fields and then continue to the next question Integrative-Determining relevant cash flows Lombard Company is contemplating the purchase of a ne depreciated under MACRS using a 5-year recovery period. The existing grinder is expected to have a usable would be depreciated under MACRS using a 5-year recovery period. Lombard can currently sell the existing! accounts receivable would increase by $39,500, inventories by $29,700, and accounts payable by $58,500. A costs and before taxes. The firm is subject a 40% tax rate. The estimated earnings before depreciation, intere MACRS depreciation percentages.) a. Calculate the initial investment associated with the replacement of the existing grinder by the new one. b. Determine the operating cash inflows associated with the proposed grinder replacement (Note: Be sure to c. Determine the terminal cash flow expected at the end of year 5 from the proposed grinder replacement d. Depict on a time line the relevant cash flows associated with the proposed grinder replacement decision. 3 A Year Profit before depreciation and taxes Depreciation Net profit before taxes Taxes $ Net profit after taxes $ $ Operating cash inflows (Round to the nearest dollar.) Year A Profit before depreciation and taxes Depreciation Net profit before taxes Taxes $ $ $ Enter any number in the edit fields and then continue to the next question Lenovo Integrative-Determining relevant cash flows Lombard Company is contemplati depreciated under MACRS using a 5-year recovery period. The existing grinder is ex would be depreciated under MACRS using a 5-year recovery period. Lombard can cu accounts receivable would increase by $39,500, inventories by 529,700, and account costs and before taxes. The firm is subject a 40% tax rate. The estimated earnings be MACRS depreciation percentages.) a. Calculate the initial investment associated with the replacement of the existing grinc b. Determine the operating cash inflows associated with the proposed grinder replacer c. Determine the terminal cash flow expected at the end of year 5 from the proposed g d. Depict on a time line the relevant cash flows associated with the proposed grinder re Year 5 Profit before depreciation and taxes Depreciation Net profit before taxes Taxes Net profit after taxes Operating cash inflows A $ $ $ $ $ (Round to the nearest dollar.) Year $ Profit before depreciation and taxes Depreciation Net profit before taxes Taxes $ $ $ $ Enter any number in the edit fields and then continue to the next question Integrative-Determining relevant cash flows Lombard Company is contemplating the purchase of a new high-spee depreciated under MACRS using a 5-year recovery period. The existing grinder is expected to have a usable life of 5 mo would be depreciated under MACRS using a 5-year recovery period. Lombard can currently sell the existing grinder for 5 accounts receivable would increase by $39,500, inventories by $29,700, and accounts payable by $58,500. At the end of costs and before taxes. The firm is subject a 40% tax rate. The estimated earnings before depreciation, interest, and taxe MACRS depreciation percentages.) a. Calculate the initial investment associated with the replacement of the existing grinder by the new one. b. Determine the operating cash inflows associated with the proposed grinder replacement. (Note: Be sure to consider the c. Determine the terminal cash flow expected at the end of year 5 from the proposed grinder replacement d. Depict on a time line the relevant cash flows associated with the proposed grinder replacement decision. Year 6 Profit before depreciation and taxes Depreciation $ Net profit before taxes s Taxes Net profit after taxes Net profit after taxes Operating cash inflows Calculation the cash flows with the new machine and the incremental cash flows below: (Round to the nearest dollar) Year Profit before depreciation and taxes Depreciation Net profit before taxes $ Enter any number in the edit fields and then continue to the next question Integrative-Determining relevant cash flows Lombard Company is contemplating the purchase of a new high-speed depreciated under MACRS using a 5-year recovery period. The existing grinder is expected to have a usable life of 5 more would be depreciated under MACRS using a 5-year recovery period. Lombard can currently sell the existing grinder for $65 accounts receivable would increase by $39,500, inventories by S29,700, and accounts payable by $58,500. At the end of 5 costs and before taxes. The firm is subject a 40% tax rate. The estimated earnings before depreciation, interest, and taxes MACRS depreciation percentages.) a. Calculate the initial investment associated with the replacement of the existing grinder by the new one. b. Determine the operating cash inflows associated with the proposed grinder replacement. (Note: Be sure to consider the de c. Determine the terminal cash flow expected at the end of year 5 from the proposed grinder replacement d. Depict on a time line the relevant cash flows associated with the proposed grinder replacement decision. $ Year Profit before depreciation and taxes Depreciation Net profit before taxes Taxes $ $ $ $ Net profit after taxes Operating cash inflows Incremental cash flows (Round to the nearest dollar.) 2 Year Profit before depreciation and taxes Depreciation Not fit hofnetava $ $ Enter any number in the edit fields and then continue to the next question Integrative-Determining relevant cash flows Lombard Company depreciated under MACRS using a 5-year recovery period. The existing grinder is expected to have a usa would be depreciated under MACRS using a 5-year recovery period. Lombard can currently sell the existi accounts receivable would increase by $39,500, inventories by $29,700, and accounts payable by $58,50 costs and before taxes. The firm is subject a 40% tax rate. The estimated earnings before depreciation, int MACRS depreciation percentages.) a. Calculate the initial investment associated with the replacement of the existing grinder by the new one. b. Determine the operating cash inflows associated with the proposed grinder replacement. (Note: Be sure c. Determine the terminal cash flow expected at the end of year 5 from the proposed grinder replacement. d. Depict on a time line the relevant cash flows associated with the proposed grinder replacement decision. 3 A A CA Year Profit before depreciation and taxes Depreciation Net profit before taxes Taxes Net profit after taxes Operating cash inflows Incremental cash flows $ CA $ $ (Round to the nearest dollar.) Year Profit before depreciation and taxes Depreciation $ $ Enter any number in the edit fields and then continue to the next question. Lenove Integrativ depreciated under MACRS using a 5-year recovery period. The existing grinder is expected to have a usab would be depreciated under MACRS using a 5-year recovery period. Lombard can currently sell the existing accounts receivable would increase by $39,500, inventories by $29,700, and accounts payable by $58,500. costs and before taxes. The firm is subject a 40% tax rate. The estimated earnings before depreciation, inte MACRS depreciation percentages.) a. Calculate the initial investment associated with the replacement of the existing grinder by the new one. b. Determine the operating cash inflows associated with the proposed grinder replacement. (Note: Be sure to c. Determine the terminal cash flow expected at the end of year 5 from the proposed grinder replacement. d. Depict on a time line the relevant cash flows associated with the proposed grinder replacement decision. Wer pront atter taxes Operating cash inflows $ Incremental cash flows (Round to the nearest dollar.) 5 $ $ A Year Profit before depreciation and taxes Depreciation Net profit before taxes Taxes Net profit after taxes Operating cash inflows Incremental cash flows (Round to the nearest dollar) Enter any number in the edit fields and then continue to the next question Integrative-Determining relevant cash flows Lo depreciated under MACRS using a 5-year recovery period. The existing grinder is expected to have a usable life of 5 more year would be depreciated under MACRS using a 5-year recovery period. Lombard can currently sell the existing grinder for $69,000 accounts receivable would increase by $39,500, inventories by $29,700, and accounts payable by $58,500. At the end of 5 year costs and before taxes. The firm is subject a 40% tax rate. The estimated earnings before depreciation, interest, and taxes over MACRS depreciation percentages.) a. Calculate the initial investment associated with the replacement of the existing grinder by the new one. b. Determine the operating cash inflows associated with the proposed grinder replacement. (Note: Be sure to consider the depre c. Determine the terminal cash flow expected at the end of year 5 from the proposed grinder replacement. d. Depict on a time line the relevant cash flows associated with the proposed grinder replacement decision. Year Profit before depreciation and taxes Depreciation Net profit before taxes 6 $ $ A Taxes $ Net profit after taxes $ Operating cash inflows $ Incremental cash flows $ c. Determine the terminal cash flow expected at the end of year 5 from the proposed grinder replacement Calculate the terminal cash flow below. (Round to the nearest dollar) Proceeds from sale of new asset $ Tax on sale of new asset Total proceeds from sale of new asset Enter any number in the edit fields and then continue to the next question Integrative-Determining relevant cash flows Lombard Company is contemplating the purchase of a new high-speed widge depreciated under MACRS using a 5-year recovery period. The existing grinder is expected to have a usable life of 5 more years would be depreciated under MACRS using a 5-year recovery period. Lombard can currently sell the existing grinder for $69,000 accounts receivable would increase by $39,500, inventories by S29,700, and accounts payable by $58,500. At the end of 5 years costs and before taxes. The firm is subject a 40% tax rate. The estimated earnings before depreciation, interest, and taxes overt MACRS depreciation percentages.) a. Calculate the initial investment associated with the replacement of the existing grinder by the new one. b. Determine the operating cash inflows associated with the proposed grinder replacement. (Note: Be sure to consider the depreca c. Determine the terminal cash flow expected at the end of year 5 from the proposed grinder replacement. d. Depict on a time line the relevant cash flows associated with the proposed grinder replacement decision. Calculate the terminal cash flow below: (Round to the nearest dollar.) Proceeds from sale of new asset Tax on sale of new asset Total proceeds from sale of new asset Change in working capital Terminal cash flow d. Depict on a time line the relevant cash flows associated with the proposed grinder replacement decision. The time line for the incremental operating cash inflows is shown below: (Select the best choice below.) O A. Year 0 2 3 4 5 6 Cash flow - 570.878 $14,403 $22.886 $18.158 $17,978 $20,472 OB. Year 0 2 5 6 Enter any number in the edit fields and then continue to the next question Chas 2 years ago at an installe e new grinder costs $109,000 and requires $5,000 in installation costs; it has a 5-year usable life out incurring any removal or cleanup costs. To support the increased business resulting from purc e existing grinder would have a market value of zero; the new grinder would be sold to net $28,20 5 years for both the new and the existing grinder are shown in the following table (Table : tion in year 6.) i Data Table - X (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Earnings before depreciation, interest, and taxes Year New grinder Existing grinder $43,900 $26.900 2 43,900 24,900 3 43,900 22,900 4. 43,900 20,900 5 43,900 18,900 1 Print Done rinder by the new one. acement. (Note: Be sure to consider the depreciation in year 6.) ed grinder replacement Her replacement decision by the DOWLAN 0 Data Table . X (Click on the icon here into a spreadsheet.) in order to copy the contents of the data table below Year 1 Earnings before depreciation, interest, and taxes New grinder Existing grinder $43,900 $26,900 43,900 24,900 43,900 22,900 43,900 20,900 43,900 18,900 2 3 4 Sosed dollar) Print Done lon
