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Mom's Cookies , Incorporated is considering the purchase of a new cookie oven . The original cost of the old oven was $ 4 8

Mom's Cookies , Incorporated is considering the purchase of a new cookie oven . The original cost of the old oven was $ 48,000 ; it is now five years old , and it has a current market value of $ 22,500. The old oven is being depreciated over a 10- year life toward a zero estimated salvage value on a straight - line basis , resulting in a current book value of $ 24,000 and an annual depreciation expense of $ 4,800 The old oven can be used for six more years but has no market value after its depreciable life is over . Management is contemplating the purchase of a new oven whose cost is $ 27,000 and whose estimated salvage value is zero . Expected before - tax cash savings from the new oven are $ 2,800 a year over its life , you can use bonus depreciation on the oven , and the cost of capital is 10 percent . Assume a 21 percent tax rate . What will the cash flows for this project be ? Note : Note that the $ 48,000 cost of the old oven is depreciated over ten years at $ 4,800 per year . The half - year convention is not used for the old oven . Negative amounts should be indicated by a minus sign . Do not round intermediate calculations and round your answers to 2 decimal places . Year 012345 FCF
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Mom's Cookies, Incorporated, is considering the purchase of a new cookie oven. The original cost of the old oven was $48,000; it is now five years old, and it has a current market value of $22,500. The old oven is being depreciated over a 10-year life toward a zero estimated salvage value on a straight-line basis, resulting in a current book value of $24,000 and an annual depreciation expense of $4,800. The old oven can be used for six more years but has no market value after its depreciable life is over. Management is contemplating the purchase of a new oven whose cost is $27,000 and whose estimated salvage value is zero. Expected before-tax cash savings from the new oven are $2,800 a year over its life, you can use bonus depreciation on the oven, and the cost of capital is 10 percent. Assume a 21 percent tax rate.
What will the cash flows for this project be?
Note: Note that the $48,000 cost of the old oven is depreciated over ten years at $4,800 per year. The half-year convention is not used for the old oven. Negative ramounts should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places.
\table[[Year,0,1,2,3,4,5],[FCF,,,,,,5]]
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