Please Solve As soon as Thank's Abdul-Rahim Taysir

77 JAWWAL II. 2 Tviaincu UUL UL 1.UU P Flag question Degnan Dance Company, Inc., a manufacturer of dance and exercise apparel, is considering replacing an existing piece of equipment with a more sophisticated machine. The following information is given. The firm pays 40 percent taxes on ordinary income and capital gains. Find the incremental after-tax cash flow (relevant cash flows) in year 6? Existing Machine Cost = $100,000 Purchased 2 years ago Deprecation using MACRS over a 5-year recover schedule Current market value = $105,000 Five year usable life remaining Facts Proposed Machine Cost = $150,000 Installation = $20,000 Depreciation-the MACRS 5-year recovery schedule will be used Five year usable life expected Earnings before Depreciation and Taxes Existing Machine Proposed Machine Year 1 $160,000 Year 1 $170,000 2. 150,000 2 170,000 3 140,000 3 170,000 4 140,000 4 170,000 5 140,000 5 170,000 Answer: 77 JAWWAL II. 2 Tviaincu UUL UL 1.UU P Flag question Degnan Dance Company, Inc., a manufacturer of dance and exercise apparel, is considering replacing an existing piece of equipment with a more sophisticated machine. The following information is given. The firm pays 40 percent taxes on ordinary income and capital gains. Find the incremental after-tax cash flow (relevant cash flows) in year 6? Existing Machine Cost = $100,000 Purchased 2 years ago Deprecation using MACRS over a 5-year recover schedule Current market value = $105,000 Five year usable life remaining Facts Proposed Machine Cost = $150,000 Installation = $20,000 Depreciation-the MACRS 5-year recovery schedule will be used Five year usable life expected Earnings before Depreciation and Taxes Existing Machine Proposed Machine Year 1 $160,000 Year 1 $170,000 2. 150,000 2 170,000 3 140,000 3 170,000 4 140,000 4 170,000 5 140,000 5 170,000