iculating initial investment Dupree Coffee Roasters, Inc., wishes to expand and modemize its facilities. The installed cost of a proposed computer controlled automatic-feed roaster will be $121,000. The fem has a ance to sell its 5-year-old roander for $36,000. The eating roaster originally cost $59,400 and was being depreciated using MACRS and a 7-year recovery period (see the table ) DuPee is subject to a 40% tax rate What is the book value of the existing roaster? Calculate the after tax proceeds of the sale of the existing roaster Calculate the change in net working capital uning the following figures Anticipated Changes in Current Assets and Current Liabilities Accruals Inventory Accounts payable Accounts receivable Cash $19.600 50.000 +40,200 +70,700 0 The remaining book value of the existing roaster is (Round to the nearest dolar) b. The after tax proceeds of the sale of the exding roaster will be 5 (Round to the nearest dollar) The change in net working capital will be (Round to the nearest dollar) d. The initial investment associated with the proposed new roastes will be (Hound to the nearest dollar) hg roa he exis be $ the pro Data table Rounded Depreciation Percentages by Recovery Year Using MACRS for First Four Property Classes Recovery year 1 2 3 4 5 6 7 8 9 10 11 Totals 3 years 33% 45% 15% 7% Percentage by recovery year" 5 years 20% 32% 19% 12% 12% 5% Print 7 years 14% 25% 18% 12% 9% 9% 9% 4% Done 10 years 10% 18% 14% 12% 9% 8% 7% 6% 100% 100% 100% "These percentages have been rounded to the nearest whole percent to simplify calculations while retaining realism. To calculate the actual depreciation for tax purposes, be sure to apply the actual unrounded percentages or directly apply double-declining balance (200%) depreciation using the half-year convention. 6% 6% 4% 100% 4 X ime F Calculating initial investment DuPree Coffee Roasters Inc wishes to expand and modomize its facilities. The installed cost of a proposed computer-controlled automatic feed master will be $121,000 The mbas a chance to sell its 5-year old roaster for $36.000 The existing master originally cost $59.400 and was being depreciated using MACRS and a 7-yee recovery period (see the table) Dufre is subject to a 80% a. What is the book value of the existing r b. Calculate the after-tax proceeds of t sale of the existing roaster c. Calculate the change in net working capital using the following figures Anticipated Changes in Current Assets and Current Liabilities Accruals Inventory Accounts payable Accounts receivable Cash -$19,600 +50,000 +40.200 +70.700 0 a. The remaining book value of the existing roaster is Round to the nearest dollar) b. The after tax proceeds of the sale of the existing master will be (Round to the nearest dolar) The change in networking capital will be Round to the nearest dollar) d. The initial investment associated with the proposed new roaster will be $(Round to the d Calculating initial investment Dufren Coffee Roasters Inc, wishes to expand and modernize its facies The installed cont of a proposed computer controlled automated roader will be $121,000 The Simha DuPree is subject to a 40%, tas rate chance to sell in 5-year-old roaster for $36,000. The existing coaster originally cost $59.400 I was being deprecated using MACRS and a 7-year recovery period (see a. What is the book value of the existing roaster? b. Calculate the after-tax proceeds of the sale of the existing roaster c. Calculate the change in net working c using the following figures Anticipated Changes in Current Assets and Current Liabilities Accruals Inventory Accounts payable Accounts receivable Cash -$19.600 +50,000 +40,200 +70,700 6
