rk aspWhomeworkid-411608 3tst.questionid-ssnushed-truescid-433ys3sacenterwin yes FINANCE 3313 Adams spring 2017 Homework: Chapter 12 Homework Score: 0 of 1 pt 7 of 7 (6 complete) v HW Score: 82.86%, 5.8 of 7 pts P11-17 (similar to) Integrative Determining ant cash flows Lombard Company is contemplating the purchase of new high speed widget ginder to the existing grinder. The existing grinder was purchased requires $4,B00 in Boot depreciated under using a perod. The expected to have a usable life of 5 more years. The new grinder costs $105.400 and installation costs. It has a usable and 2 years ago would be under MACRS using a 5 year recovery period Lombard can cumenty sel he existing grinder for $69.Moo without incurring any removal or cleanup costs. To supoort increased business resulting from purchase of the new grinder, accounts receivable would increase by inventories by S30 500, and acoounts payable by $50.000. At the end years, the existing grinder would have a marknt value of zero the new grinder would be sold to retszaeco after removal and deanup costs and before The frm is earings The 5 years for both the new and the existing grinder are shown in the folowing table Table m contains the applicablo MACRS depreciaton percentages) Calculate the initialinvestment associated with the replacement of the existing grinder by the new one, b. Determine the incremental operating cash innows associated with the proposed grinder replacement Note Be sure to consider the depreciation in year 6) Determine the terminal cash sow expected atthe end of year 5 from the proposed grinder eplacement Depict on a time line the rolovanf cash flows associated with the proposed grinder replacement decision. a Calculate the initial investment associated with replacement ofthe old machine by the new one. Calculate the initial investment below (Round to the nearest dolar) Cost of new asset Total cost of new asset Proceeds from sale of old asset s Tax on sale of old asset Total proceeds, sale of old asset Change in working capital Enter any number in the edit fields and then click Check Answer. 15