Terminal cash flow-Replacement decision Russell Industries is considering replacing a fully depreciate machine will cost $198,000 and will require $30,500 in installation costs. It will be depreciated under MACRS increase in net working capital will be required to support the new machine. The firm's managers plan to eval end of 4 years to net $14,800 before taxes, the new machine at the end of 4 years will be worth $71,000 befo 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 dollar) $ 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 Terminal cash flow $ $ Enter any number in the edit fields and then continue to the naut replacing a fully depreciated machine that has a remaining useful life of 10 years with a newer, more sophisticated machine. The new depreciated under MACRS using a 5-year recovery period (see the table for the applicable depreciation percentages). A $25,000 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 es will be worth 571,000 before taxes Calculate the terminal cash flow at the end of year 4 that is relevant to the proposed purchase of the nearest dollar) Hon - 10 years 19% 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% 10% 2 45% 32% 25% 18% 3 15% 18% 14% 4 7% 12% 12% 12% 5 12% 9% 9% 6 5% 9% 7 9% 7% 4% 6% 9 6% 10 6% 11 4% Totals 100% 100% 100% 100% These percentages have been rounded to the nearest whole percent to simplity calculations while retaining alim To calculate the actual denaciation for tax Dumnes be sure to only the actual 8% Print Done hp $ 96 4 5 & 7 00 Y U 2 1 O P. IROL JU = G H J K - BINIMI. P