Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please answer a-d will give thumbs, thank you! due befofe 8:30! Integrative-Dotermining relevant cash flows Lombard Company is contemplaing the purchase of a new high-speed

please answer a-d will give thumbs, thank you! due befofe 8:30! image text in transcribed
image text in transcribed
image text in transcribed
Integrative-Dotermining relevant cash flows Lombard Company is contemplaing the purchase of a new high-speed widgel grinder to replace be eccitng grinder. The existing grinder was purchased 2 years ago at an installed cost of $56,600, it was being deprecialed under MACRS using a 5 year recovery period. The exating grinder is expected to have a usable ife of 5 more yearn. The new ginder costs $109,900 and requires $4,700 in instalason coits; at has a 5 -year upable ite and would be depreclabed under MACRS using a 5-year recovery period. Lombard can curenty sel the eviling ornder for 569 , 4so wathout incuring any remoral or cleanup costs. To support the earnings belore ceprotation, interest, and taxes over the 5 years for both the new and the ewising grinder are shown in the following table depreciation percentages.) 2. Cilculate the inatia imvestment assoclated with the replacement of the existing grider by the new one. b. Determine the opevating east infown assodated with the proposed griver replacement oNote fle ware to censider the depreciabion in year 63 c. Determine the formhal cash for expected at the end of year 5 from the propoted grinder neclacervent. d. Depict on a ime line the relevant cash fows associated weh the proposed ginder replacement decision. a. Caculwe fre intial invostrient associated with replacemert of the olg machine by the naw one Calculale the ivtial investment below: (Roond to the nearest dolk.) in installed cost of $56,800; it was being depreciated under MACRS using a 5-year recovery 9,900 and requires $4,700 in installation costs; it has a 5-year usable life and r MACRS using a 5-year recovery period. Lombard can currently sell the existing grinder for ig from purchase of the new grinder, accounts receivable would increase by $39,800, inventor a market value of zero; the new grinder would be sold to net $28,000 after removal and clea: Data table (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) fick on the icon here in order to copy the contents of the data table below into a spreadsheet.) Rounded Depreciation Percentages by Recovery Year Using MACRS for First Four Property Classes retaining realism. To calculate the actual wepreciation for tax percent to simplify calculations while unrounded percentages or directly apply dopreciation for tax purposes, be sure to apply the actual convention

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

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

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

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

Get Started

Students also viewed these Finance questions