Question Completion Statu QUESTION harwe Dining Services isconsideing an upgrade to their commercial cooking and vetfrigeration equipment The new eqipment wodo of the current eqipment o any tax savings or losses that wll occur as a nesult of sae The current equipment was purchased 2 years ago at acost of $317,800 and in being depciated using an acceleratnd depriato s the cost, less the method The bock vakue of the courmrent equpment for $12,700 the curent maket vae Filly,new equpment will rest inanal the last 2 years if new equipment is purchased it ilbe decated using the same aceaed depcaion method (table o accumulated deprecalion from Chartwls to sel the curent eq below) In addition purchasing the new equaipment will allow or the nest 5 years in varying amounts ied below) Chartweb has a tax rate of33%ardrepares a return on Incremental Canh Flow (Cash Savings 41,000 41 000 20 000 $18.000 15,000 Year 2 332 Yew):202% What is the net preent walue of replacing the asser sed on your other estiype your Question Completion Status QUESTION 1 Chartwells Dining Services is considering an upgrade to their commercial cooking and refrigeration of the current equipment or any tax savings or losses that will occur as a result of that sale The current equipment was purchased 2 years ago at a cost of $317,800 and is being depreciated using an accelerated depreciation melthod. The book valun of the current equipment s the cost, less the accumulated depreciation from the last 2 years. f new equomentis purchased, t will be depreciated using the same accelesrated deprecation method (table equpment. The new epupment weould cost $600,00, before consdering the sae below). In addition, purchasing the new equipment will allow Chartwells to sell the current equipment for $12,700, the current market value Finally, new equipment will result in annual cost savings for the next 5 years in varying amounts (listed below) Cartwels has a tax rate of 33% and requires a return on investment of 8% for all capital expenditures Incremental Cash Flow (Cash Savings) Depreciation Year 1 :21% Year 2-332 Year 3 = 202% Year 4 : 125% Year 5 13 1% What is the net present value of replacing this asset? $41,000 $41,000 $20,000 $18,000 QUESTION 2 Based on your other question - type your answer to the following questions 1) What is the difference in depreciation for each year? (15 Points) 2) What is the tax savings as a result of the difference in depreciation for each year7 (15 Points) 3) What is the Net Cash Flow benefit from the incremental cash flows for each year (S Points) 4) What is the Present Value of the total savings for each year? (15 Points) 5) What is the initial Investment? (20 Points 6) What is the tax savings/loss that will be realized from the sale of the current equipmentz (10 Points) Click Sans und Submit toause and 1mir. Click Saue An Auvers to one an anneers. Question Completion Statu QUESTION harwe Dining Services isconsideing an upgrade to their commercial cooking and vetfrigeration equipment The new eqipment wodo of the current eqipment o any tax savings or losses that wll occur as a nesult of sae The current equipment was purchased 2 years ago at acost of $317,800 and in being depciated using an acceleratnd depriato s the cost, less the method The bock vakue of the courmrent equpment for $12,700 the curent maket vae Filly,new equpment will rest inanal the last 2 years if new equipment is purchased it ilbe decated using the same aceaed depcaion method (table o accumulated deprecalion from Chartwls to sel the curent eq below) In addition purchasing the new equaipment will allow or the nest 5 years in varying amounts ied below) Chartweb has a tax rate of33%ardrepares a return on Incremental Canh Flow (Cash Savings 41,000 41 000 20 000 $18.000 15,000 Year 2 332 Yew):202% What is the net preent walue of replacing the asser sed on your other estiype your Question Completion Status QUESTION 1 Chartwells Dining Services is considering an upgrade to their commercial cooking and refrigeration of the current equipment or any tax savings or losses that will occur as a result of that sale The current equipment was purchased 2 years ago at a cost of $317,800 and is being depreciated using an accelerated depreciation melthod. The book valun of the current equipment s the cost, less the accumulated depreciation from the last 2 years. f new equomentis purchased, t will be depreciated using the same accelesrated deprecation method (table equpment. The new epupment weould cost $600,00, before consdering the sae below). In addition, purchasing the new equipment will allow Chartwells to sell the current equipment for $12,700, the current market value Finally, new equipment will result in annual cost savings for the next 5 years in varying amounts (listed below) Cartwels has a tax rate of 33% and requires a return on investment of 8% for all capital expenditures Incremental Cash Flow (Cash Savings) Depreciation Year 1 :21% Year 2-332 Year 3 = 202% Year 4 : 125% Year 5 13 1% What is the net present value of replacing this asset? $41,000 $41,000 $20,000 $18,000 QUESTION 2 Based on your other question - type your answer to the following questions 1) What is the difference in depreciation for each year? (15 Points) 2) What is the tax savings as a result of the difference in depreciation for each year7 (15 Points) 3) What is the Net Cash Flow benefit from the incremental cash flows for each year (S Points) 4) What is the Present Value of the total savings for each year? (15 Points) 5) What is the initial Investment? (20 Points 6) What is the tax savings/loss that will be realized from the sale of the current equipmentz (10 Points) Click Sans und Submit toause and 1mir. Click Saue An Auvers to one an anneers
