Score: 0 of 1 pt 6 of 8 (2 complete) HW Score: 12 5%, 1 of 8 pls Question 6, P11-22 (similar to) Question Help Terminal cash flow-Replacement decision Russell Industries is considering replacing a fully depreciated machine that has a remaining useful life of 10 years with a newer, more sophisticated machine. The new machine will cost $195,000 and will require 529.900 in installation costs. It will be depreciated under MACRS using a 5-year recovery period (see the table for the applicable depreciation percentages). A $29,000 increase in net working capital will be required to support the new machine. The firm's managers plan to evaluate the potential replacement over a 4-year period. They estimate that the old machine could be sold at the end of 4 years to net 515,900 before taxes, the new machine at the end of 4 years will be worth $77,000 before taxes. Calculate the terminal cash flow at the end of year 4 that is relevant to the proposed purchase of the new machine. The firm is subject to a 40% tax rate The terminal cash flow for the replacement decision is shown below: (Round to the nearest Data Table $ (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet) S Proceeds from sale of new machine Tax on sale of new machine Total after-tax proceeds-new asset Proceeds from sale of old machine Tax on sale of old machine Total after-tax proceeds-old asset Change in net working capital S 5 10 years Terminal cash flow S Rounded Depreciation Percentages by Recovery Year Using MACRS for First Four Property Classes Percentage by recovery year Recovery year 3 years 5 years 7 years 1 33% 20% 14% 2 45% 32% 25% 3 15% 19% 18% 4 7% 12% 1296 5 129 9% 6 5% 995 7 9% 8 9 10 11 10% 18% 14% 12% 99 8% 7% 6% 6% 6% Enter any number in the edit fields and then click Check Answer All parts showing Type here to search O | 6495 6496 1005 AM 9/25/2020