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Terminal cash flow - Replacement decision Russell Industries is considering replacing a fully deprecated machine that has a remaining used to cr 10 years with

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Terminal cash flow - Replacement decision Russell Industries is considering replacing a fully deprecated machine that has a remaining used to cr 10 years with a newer, tnore sophisticated machine. The new machine will cost 5198,000 and will require $29.800 in installation costs.It wit be depreciated under MACRS uning aynar recovery period to the table for the applicable depreciation percentages). A $20,000 incluse in networking capital will be required to support the new machine. The firm's morgers plan to evaluate the potential replacement over a 4-year period. They estimate that the old machine could be sola al me end of 4 years to nol s16 B00 before lavet, the new machine at the end of 4 years will be worth $80.000 before taxe Calculate the terminal cash low at the end of years to relevant to the proposed purchase of the new machine. The firm is subject to a 40% tax rate The terminal cash flow for the placement decision is shown below. Round to the nearest dolar) Proceeds from sale of new machino Tax on salotow machine Total War-tax roceeds was Proceeds from sale of old machine Toni of old machine Telstars old at Change in not working at Terminal show $ 5 Data table sent de and will capital $16.800 The firm more sophisticated machine. The plicable depreciatiopercentages) A estimate that the old machine could be year that is relevant to the proposed eplacemd machind 79 (Click on the icon here in order to copy the contents of the data table below into a spreadsheet) 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 10 years 33% 20% 14% 10% 2 45% 32% 25% 18% 3 15% 19% 18% 14% 4 12% 12% 5 12% 9% 996 6 5% 99 8% 7 9% 79 B 49 6% 9 0% 89 10 4% 11 100% 100% 100% 100% Totals "These percentages have been rounded to the nearest Whole percent to simply calculations while TO -new asse d machine 12 no Is-old assot capital Print Done hing: 00:1507 Next

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