Score: 0 of 2 pts 9 of 10 (complete HW Score: 10:34%, 11 25 of 16 pts P11-24 (similar to) 0 Net cash flows No terminal value Central Laundry and Cleaners is considering replacing an ething piece of machinery with a more sophisticated machine. The old machine was purchased 3 years ago at a cost of 61.200and the amount was being deprecated under MACRS using a 5-year recovery period. The machine has 5 years of all remaining the new machine that is being considered costs $7.000 and requires 54.200 in installation cons. The new machine would be depreciated under MACRS singapo recovery period. The firm can currently sell the old machine for $54600 without incurring any removal or cleanup costs. The film is subject to a tax rate of 40%. The ves and expenseududing depreciation and interest toated with the new and the old machines for the next 5 years are given in the table Table contains the applicable MACRS depreciation percentages.) Note. The new machine wie formats and a. Calculate the investment associated with replacement of the old machine by the new one b. Determine the incremental operating chased with the proposed replacement ( Nees Data Table -X c. Depict on a time in the relevant cash flows found in parts (a) and (b) associated with the proposed up Proceeds from all of old as $ Click on the con located on the otheebrew in order to copy the content area) Tax on sale of old asset 15.900 Total proceeds, sale of (38.700) Newman Old machine Expenses 200 hal investment Expenses facluding depreciation fcluding depreciation Year Revenge andre Reve b. Determine the mental parating cash flow rated with the proposed replacement Nate Best 1 3751000 5717500 167 So 2 7510 719 500 Calculate the cash flows with the old machine below Round to the 75,00 659.000 3 751003 719.500 53000 Data Table 4 751000 719.500 677,500 650 000 Year 5 751000 673.900 650 000 Profil before depreciation and $ 10900 Depreciation Click on the con located Done spre Net probeer 5 Rounded Depreciations by Year MORSTO First Four Property Class 5 Percentage by recovery year 7 year 5 Recovery year 10 years 2011 14 25 Emany rumber in the ends and then check Answer 1 191 12N Check 125 55 9 710 12 RI plyne here to search Tax on sale or old asset Total proceeds, sale of old asset (38,700) 42,500 Initial investment $ b. Determine the incremental operating cash inflows associated with the proposed replacement Calculate the cash flows with the old machine below: (Round to the nearest dollar.) Year 1 $ 14900 Profit before depreciation and taxes Depreciation Net profit before taxes $ $ Taxes Net profit after taxes $ Operating cash inflows GA Enter any number in the edit fields and then click Check Answer. 12 parts remaining wede of machinery with a more sophisticated machine. The old machine was purchased 3 years ago at a cost of $51 life remaining. The new machine that is being considered costs $77,000 and requires $4,200 in installation costs. The new machine would be urring any removal or cleanup costs. The firm is subject to a tax rate of 40%. The revenues and expenses (excluding depreciation and intere rcentages.) Note: The new machine will have no terminal value at the end of 5 years. y the new one. eplacement. (Note: Be sure to consider the depreciation in year 6.) with the proposed replacement decision. 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.) New machine Old machine Expenses Expenses (excluding depreciation (excluding depreciation Year Revenue and interest) Revenue and interest) $751,000 $719,500 $673,900 $659,000 751,000 719,500 675,900 659,000 751,000 719,500 679,900 659,000 751,000 719,500 677,900 659,000 751,000 719,500 673,900 659,000 1 Print Done Clear All * Data Table - X (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) 10 years 5 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 33% 20% 14% 10% 2 45% 32% 25% 18% 15% 19% 18% 14% 4 7% 12% 12% 12% 12% 9% 9% 6 5% 9% 8% 7 9% 7% 8 4% 6% 9 6% 10 6% 11 4% Totals 100% 100% 100% 100% *These percentages have been rounded to the nearest whole percent to simplify calculations while retaining realism. To calculate the actual depreciation for tax purposes, be sure to apply the actual unrounded percentages or directly apply double-declining balance (200%) depreciation using the half-year convention Print Done Score: 0 of 2 pts 9 of 10 (complete HW Score: 10:34%, 11 25 of 16 pts P11-24 (similar to) 0 Net cash flows No terminal value Central Laundry and Cleaners is considering replacing an ething piece of machinery with a more sophisticated machine. The old machine was purchased 3 years ago at a cost of 61.200and the amount was being deprecated under MACRS using a 5-year recovery period. The machine has 5 years of all remaining the new machine that is being considered costs $7.000 and requires 54.200 in installation cons. The new machine would be depreciated under MACRS singapo recovery period. The firm can currently sell the old machine for $54600 without incurring any removal or cleanup costs. The film is subject to a tax rate of 40%. The ves and expenseududing depreciation and interest toated with the new and the old machines for the next 5 years are given in the table Table contains the applicable MACRS depreciation percentages.) Note. The new machine wie formats and a. Calculate the investment associated with replacement of the old machine by the new one b. Determine the incremental operating chased with the proposed replacement ( Nees Data Table -X c. Depict on a time in the relevant cash flows found in parts (a) and (b) associated with the proposed up Proceeds from all of old as $ Click on the con located on the otheebrew in order to copy the content area) Tax on sale of old asset 15.900 Total proceeds, sale of (38.700) Newman Old machine Expenses 200 hal investment Expenses facluding depreciation fcluding depreciation Year Revenge andre Reve b. Determine the mental parating cash flow rated with the proposed replacement Nate Best 1 3751000 5717500 167 So 2 7510 719 500 Calculate the cash flows with the old machine below Round to the 75,00 659.000 3 751003 719.500 53000 Data Table 4 751000 719.500 677,500 650 000 Year 5 751000 673.900 650 000 Profil before depreciation and $ 10900 Depreciation Click on the con located Done spre Net probeer 5 Rounded Depreciations by Year MORSTO First Four Property Class 5 Percentage by recovery year 7 year 5 Recovery year 10 years 2011 14 25 Emany rumber in the ends and then check Answer 1 191 12N Check 125 55 9 710 12 RI plyne here to search Tax on sale or old asset Total proceeds, sale of old asset (38,700) 42,500 Initial investment $ b. Determine the incremental operating cash inflows associated with the proposed replacement Calculate the cash flows with the old machine below: (Round to the nearest dollar.) Year 1 $ 14900 Profit before depreciation and taxes Depreciation Net profit before taxes $ $ Taxes Net profit after taxes $ Operating cash inflows GA Enter any number in the edit fields and then click Check Answer. 12 parts remaining wede of machinery with a more sophisticated machine. The old machine was purchased 3 years ago at a cost of $51 life remaining. The new machine that is being considered costs $77,000 and requires $4,200 in installation costs. The new machine would be urring any removal or cleanup costs. The firm is subject to a tax rate of 40%. The revenues and expenses (excluding depreciation and intere rcentages.) Note: The new machine will have no terminal value at the end of 5 years. y the new one. eplacement. (Note: Be sure to consider the depreciation in year 6.) with the proposed replacement decision. 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.) New machine Old machine Expenses Expenses (excluding depreciation (excluding depreciation Year Revenue and interest) Revenue and interest) $751,000 $719,500 $673,900 $659,000 751,000 719,500 675,900 659,000 751,000 719,500 679,900 659,000 751,000 719,500 677,900 659,000 751,000 719,500 673,900 659,000 1 Print Done Clear All * Data Table - X (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) 10 years 5 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 33% 20% 14% 10% 2 45% 32% 25% 18% 15% 19% 18% 14% 4 7% 12% 12% 12% 12% 9% 9% 6 5% 9% 8% 7 9% 7% 8 4% 6% 9 6% 10 6% 11 4% Totals 100% 100% 100% 100% *These percentages have been rounded to the nearest whole percent to simplify calculations while retaining realism. To calculate the actual depreciation for tax purposes, be sure to apply the actual unrounded percentages or directly apply double-declining balance (200%) depreciation using the half-year convention Print Done
