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Please do not show work and answers in handwriting, because I do not always understand what is written. Thank you so much! DataPoint Engineering is
Please do not show work and answers in handwriting, because I do not always understand what is written. Thank you so much!
DataPoint Engineering is considering the purchase of a new piece of equipment for $400,000. It has an eight-year midpoint of its asset depreciation range (ADR). It will require an additional initial investment of $220,000 in nondepreciable working capital. Seventy-five thousand dollars of this investment will be recovered after the sixth year and will provide additional cash flow for that year. Income before depreciation and taxes for the next six are shown in the following table. Use Table 12-11. Table 12-12. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. Year Amount 1 $233,000 2 192,000 162,000 147,000 111,000 101,000 The tax rate is 30 percent. The cost of capital must be computed based on the following Cost aftertax) Weights Debt Preferred stock Common equity (retained eamings) Kd Kp Ke 8.20% 12.80 17.00 25% 15 60 a. Determine the annual depreciation schedule. (Do not round intermediate calculations. Round your depreciation base and annual depreciation answers to the nearest whole dollar. Round your percentage depreciation answers to 3 decimal places.)Step by Step Solution
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