Answered step by step
Verified Expert Solution
Link Copied!

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

image text in transcribedimage text in transcribed

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

blur-text-image

Get Instant Access to Expert-Tailored 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

Recommended Textbook for

Finance And Sustainability

Authors: William Sun, Celine Louche, Roland Perez

1st Edition

1780520921, 978-1780520926

More Books

Students also viewed these Finance questions

Question

3. What should a contract of employment contain?

Answered: 1 week ago

Question

1. What does the term employment relationship mean?

Answered: 1 week ago