Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Need income statement and cash flow statement . Show annualized entries for revenue, itemized expenses taxable income, taxes, investment activities and net cash flow. Company,

Need income statement and cash flow statement. Show annualized entries for revenue, itemized expenses taxable income, taxes, investment activities and net cash flow.

Company, Lakeview Products, is considering a new injection molding machine. uses MARR of 10%, effective income tax rate is 24%. The injection molding machine would depreciate using 7-year MACRS. Useful life: 8 years.

image text in transcribed

Project Gold data: Equipment cost: The purchase cost is $320,000 before taxes. The purchase is subject to 5 % sales tax. The total cost of the freight and handling of the machine is expected to be $26,000. The total cost to install the machine is $18,000. Total testing and startup costs to place the injection molding machine into service are estimated to be $14,000. It is estimated that the injection molding machine can be sold as salvage for $90,000 at the end of the project. Operating costs: This machine requires two operators working per shift and there are two shifts. The cost of each operator is $24.00 per hour and they each work 2000 hours per year. There are two shifts and each shift runs 2000 hours per year. Total annual direct materials are estimated at $410,000. Manufacturing overhead exclusive of depreciation is expected to be an additional $170,000 per year. Revenues: Expected to be $900,000 each year starting year 1 using this machine throughout the project

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Teams Audit

Authors: Kevin Barham

1st Edition

1907766030, 978-1907766039

More Books

Students also viewed these Accounting questions