The firm is looking to expand its operations by 10% of the firm's net property, plant, and equipment. (Calculate this amount by taking 10% of the property, plant, and equipment figure that appears on the firm's balance sheet.)
The estimated life of this new property, plant, and equipment will be 12 years. The salvage value of the equipment will be 5% of the property, plant, and equipment cost.
The company will use the straight-line method to depreciate this equipment. Also, assume that there will be no increases in net working capital each year. Use 25% as the tax rate in this project.
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(millions, except footnotes) January 29, 2022 January 30,2021 Assets Cash and cash equivalents $ Inventory Other current assets Total current assets 5,911 13,902 1,760 21,573 $ 8,51110,6531,59220,756 Property and equipment Land Buildings and improvements Fixtures and equipment Computer hardware and software Construction-in-progress Accumulated depreciation Property and equipment, net Operating lease assets Other noncurrent assets Total assets 6,14131,5575,9142,76578020,27826,8792,2271,38651,248 Liabilities and shareholders' investment Accounts payable $ $ 12,85g Accrued and other current liabilities Current portion of long-term debt and other borrowings 6,122 Total current liabilities Long-term debt and other borrowings Noncurrent operating lease liabilities Deferred income taxes Other noncurrent liabilities Total noncurrent liabilities \begin{tabular}{r} 15,478 \\ \hline 6,098 \\ 171 \\ \hline 21,747 \\ 13,549 \\ 2,493 \\ 1,566 \\ 1,629 \\ 19,237 \end{tabular} 1,125 11,536 2,218 990 1,939 16,683 Shareholders' investment Common stock 39 Additional paid-in capital Retained earnings Accumulated other comprehensive loss Total shareholders' investment Total liabilities and shareholders' investment $ (millions, except footnotes) January 29, 2022 January 30,2021 Assets Cash and cash equivalents $ Inventory Other current assets Total current assets 5,911 13,902 1,760 21,573 $ 8,51110,6531,59220,756 Property and equipment Land Buildings and improvements Fixtures and equipment Computer hardware and software Construction-in-progress Accumulated depreciation Property and equipment, net Operating lease assets Other noncurrent assets Total assets 6,14131,5575,9142,76578020,27826,8792,2271,38651,248 Liabilities and shareholders' investment Accounts payable $ $ 12,85g Accrued and other current liabilities Current portion of long-term debt and other borrowings 6,122 Total current liabilities Long-term debt and other borrowings Noncurrent operating lease liabilities Deferred income taxes Other noncurrent liabilities Total noncurrent liabilities \begin{tabular}{r} 15,478 \\ \hline 6,098 \\ 171 \\ \hline 21,747 \\ 13,549 \\ 2,493 \\ 1,566 \\ 1,629 \\ 19,237 \end{tabular} 1,125 11,536 2,218 990 1,939 16,683 Shareholders' investment Common stock 39 Additional paid-in capital Retained earnings Accumulated other comprehensive loss Total shareholders' investment Total liabilities and shareholders' investment $
