Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Please Help Diltz Farms is considering investing in an automated egg-sorting system to increase production for international (web-based) sales of Diltz Farms' products. The new
Please Help
Diltz Farms is considering investing in an automated egg-sorting system to increase production for international (web-based) sales of Diltz Farms' products. The new system will cost $3563 including installation. It will be fully depreciated in 5 yrs. (straight-line) to zero and generate $193 after-tax gain at the end of the projected period (year 6 ). The initial working captital will be $374 and will be $613 in year one and increase each year thereafter by 5 percent.Assume that at year 0 , there is no change in working capital. Revenues generated from the egg-sorter are expected to be $1176 in year one, and increase by five percent each year. Expenses are tent percent revenues. Diltz Fams' cost of capital is 6%. Using the discounted cash-flow analysis, should Diltz Fams invest in the machinery? What is the NPV of the egg-sorter project? Asume Tax rate as 35% Problem 2: Depreciation Table Your firm recently purchased an industrial machine costing $36170000. It is classified as a seven-year property under MACRS. What are the annual depreciation allowances and end-of-the-year book values for this machine? is larger at the beginning. In cell B67 enter the cost of the machine In cell D67 enter: =C67$B$67 and drag it down till D74 In cell E67 enter: =B67D67 and then drag it down till E74 In cell B68 enter: =E67 and drag it till B 74 Score (10) Only if all the cells in the depreciation table are correct you would get full points, otherwise zero. There are no partial points for this table. Diltz Farms is considering investing in an automated egg-sorting system to increase production for international (web-based) sales of Diltz Farms' products. The new system will cost $3563 including installation. It will be fully depreciated in 5 yrs. (straight-line) to zero and generate $193 after-tax gain at the end of the projected period (year 6 ). The initial working captital will be $374 and will be $613 in year one and increase each year thereafter by 5 percent.Assume that at year 0 , there is no change in working capital. Revenues generated from the egg-sorter are expected to be $1176 in year one, and increase by five percent each year. Expenses are tent percent revenues. Diltz Fams' cost of capital is 6%. Using the discounted cash-flow analysis, should Diltz Fams invest in the machinery? What is the NPV of the egg-sorter project? Asume Tax rate as 35% Problem 2: Depreciation Table Your firm recently purchased an industrial machine costing $36170000. It is classified as a seven-year property under MACRS. What are the annual depreciation allowances and end-of-the-year book values for this machine? is larger at the beginning. In cell B67 enter the cost of the machine In cell D67 enter: =C67$B$67 and drag it down till D74 In cell E67 enter: =B67D67 and then drag it down till E74 In cell B68 enter: =E67 and drag it till B 74 Score (10) Only if all the cells in the depreciation table are correct you would get full points, otherwise zero. There are no partial points for this table
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