Question
ONLY ANSWER QUESTON 2 PLEASEEE !!!!! Q1)Company A is interested in purchasing a new printing machine. The cost of the machine will be 50.000 TL,
ONLY ANSWER QUESTON 2 PLEASEEE !!!!!
Q1)Company A is interested in purchasing a new printing machine. The cost of the machine will be 50.000 TL, and an additional 10.000 TL will be given for its transportation and installation. In case of this purchase, it is expected that the Net Working Capital requirement will increase by 5,000 TL. The depreciation method of this machine, which has a useful life of 4 years, is taken into account as linear and its scrap value is zero for tax purposes. Machinery investment will increase company sales by 110,000 TL annually, while operating expenses will increase by 70,000 TL. If it is assumed that the machine can be sold for 10.000 TL at the end of 4 years and the corporate tax rate is 40% and the capital cost of the company is 10%, this investment; ONLY ANSWER Q2
Q2)
Let's assume that the machinery investment mentioned in the first question is a replacement investment. The value of the old original machine is 30.000TL, it was bought 2 years ago and its life is 5 years, subject to linear depreciation. The new offered machine will be used in the first question and this machine, which is said to be better, will also use the straight-line depreciation method and its scrap value is zero. It is planned that the old machine can be sold for 6.000TL in case of buying a new one. While the new machine will not increase the sales (110.000TL will remain the same), it will save 10.000TL annually in operating expenses (old 70.000 new 60.000). With the new machine, the need for working capital is expected to increase to 10,000 TL (it was 5,000 TL in the past). Wanted)
Should this machine be changed at the end of the 2nd year?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started