please rewrite the answer but with double decline method not MACORS method

rewrite the answer but with dabble decline or street line method not MACORS method

- - Example of Asset Replacement \$1 1.0000 an finlime: The tow moshine whould cut labor and maishesence wosts and prodase othet canb savings tutaling 57, ab0 a year before taun fer caph of the nerst four years, after which it will probuldy revenac savirges be the frim if it replace the wald mold with the new otic. Aemember, we are verwas feplacing 4 with a sorw ene. 1. The eqiginal dojeciate buie was 49 inga. 2. The mald tell attu the throe-yeat peoperty dase. 3. The rumainizg depreciathe life is two yians. Mecauke we are interested is the incremental aspact of the gropect, we must mbtract deyeedejecciation chatgon triclting from the acceptance of the project. The ncenary calculations ane as followe + Fivel edivate valter to teite" aiset - Example of Asset Replacement To go to a somewhat more complicated example, we suppose that we are considering the purchase of a new automotive-glass mold to replace an old mold and that we need to obtain cash-flow information to evaluate the attractiveness of this project. The purchase price of the new mold is $18,500, and it will require an additional $1,500 to install, bringing the total cost to $20,000. The old mold, which has a remaining useful life of four years, can be sold for its depreciated (tax) book value of $2,000. The old mold would have no salvage value if held to the end of its useful life. Notice that, as salvage value equals tax book value, taxes due to the sale of the old asset are zero. The initial cash outfiow for the investment project, therefore, is $18,Mnn as follows: The new machine should cut labor and maintenance costs and produce other cash savings totaling $7,100 a year before taxes for each of the next four years, after which it will probably not provide any savings nor have a salvage value. These savings represent the net operating revenue savings to the firm if it replaces the old mold with the new one. Remember, we are concerned with the differences in the cash flows resulting from continuing to use the old mold versus replacing it with a new one. Suppose that the new mold we are considering falls into the three-year property category for MACRS depreciation. Moreover, assume the following in regards to the old mold: 1. The original depreciable basis was $9,000. 2. The mold fell into the three-year property class. 3. The remaining depreciable life is two years. Because we are interested in the incremental impact of the project, we must subtract depreCiation charges on the old mold from depreciation charges on the new one to obtain the incremental depreciation charges associated with the project. Given the information provided plus the appropriate MACRS depreciation percentages, we are able to calculate the difference in depreciation charges resulting from the acceptance of the project. The necessary calculations arc as follows: 12. Crpital Butgeting tod Etierating Cash Fles envieions that use of the new fiscility will generate additional net operatiog reverue cank flem, before condidenstion of depreciation and taxes, at follons: Assuming that the marginal tax rate equals 40 percent, we now need to estimute the project's relevint incremental ash flows. The first step is to estimate the project's initial cash outlow: The next steps involve calcalating the incremental future cash flows. 'MACRS deptraiation percentages for 3-year propenty das avet afrlied afainst ausit with a depteaiahe busis of 5100,000 . 'Aanumes that trx loss diselds other income of the firm. 516,500(0.40)=56.000 The expected incremental net cash flows from the project are Taus, for an initial cash outflow of $100,000, the firm expects to gencrate net cash flows of $34,432,539,530,$39,399, and $32,219 aver the ncat four ycars. This data fepreients the releyant caih-flow information that we need to judge the agtractivenes of the project. - - Example of Asset Replacement \$1 1.0000 an finlime: The tow moshine whould cut labor and maishesence wosts and prodase othet canb savings tutaling 57, ab0 a year before taun fer caph of the nerst four years, after which it will probuldy revenac savirges be the frim if it replace the wald mold with the new otic. Aemember, we are verwas feplacing 4 with a sorw ene. 1. The eqiginal dojeciate buie was 49 inga. 2. The mald tell attu the throe-yeat peoperty dase. 3. The rumainizg depreciathe life is two yians. Mecauke we are interested is the incremental aspact of the gropect, we must mbtract deyeedejecciation chatgon triclting from the acceptance of the project. The ncenary calculations ane as followe + Fivel edivate valter to teite" aiset - Example of Asset Replacement To go to a somewhat more complicated example, we suppose that we are considering the purchase of a new automotive-glass mold to replace an old mold and that we need to obtain cash-flow information to evaluate the attractiveness of this project. The purchase price of the new mold is $18,500, and it will require an additional $1,500 to install, bringing the total cost to $20,000. The old mold, which has a remaining useful life of four years, can be sold for its depreciated (tax) book value of $2,000. The old mold would have no salvage value if held to the end of its useful life. Notice that, as salvage value equals tax book value, taxes due to the sale of the old asset are zero. The initial cash outfiow for the investment project, therefore, is $18,Mnn as follows: The new machine should cut labor and maintenance costs and produce other cash savings totaling $7,100 a year before taxes for each of the next four years, after which it will probably not provide any savings nor have a salvage value. These savings represent the net operating revenue savings to the firm if it replaces the old mold with the new one. Remember, we are concerned with the differences in the cash flows resulting from continuing to use the old mold versus replacing it with a new one. Suppose that the new mold we are considering falls into the three-year property category for MACRS depreciation. Moreover, assume the following in regards to the old mold: 1. The original depreciable basis was $9,000. 2. The mold fell into the three-year property class. 3. The remaining depreciable life is two years. Because we are interested in the incremental impact of the project, we must subtract depreCiation charges on the old mold from depreciation charges on the new one to obtain the incremental depreciation charges associated with the project. Given the information provided plus the appropriate MACRS depreciation percentages, we are able to calculate the difference in depreciation charges resulting from the acceptance of the project. The necessary calculations arc as follows: 12. Crpital Butgeting tod Etierating Cash Fles envieions that use of the new fiscility will generate additional net operatiog reverue cank flem, before condidenstion of depreciation and taxes, at follons: Assuming that the marginal tax rate equals 40 percent, we now need to estimute the project's relevint incremental ash flows. The first step is to estimate the project's initial cash outlow: The next steps involve calcalating the incremental future cash flows. 'MACRS deptraiation percentages for 3-year propenty das avet afrlied afainst ausit with a depteaiahe busis of 5100,000 . 'Aanumes that trx loss diselds other income of the firm. 516,500(0.40)=56.000 The expected incremental net cash flows from the project are Taus, for an initial cash outflow of $100,000, the firm expects to gencrate net cash flows of $34,432,539,530,$39,399, and $32,219 aver the ncat four ycars. This data fepreients the releyant caih-flow information that we need to judge the agtractivenes of the project