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The Mighty Mouse Computer company is considering whether or not to install a packaging robot. The robot initial cost $460,000, shipping cost $30,000 and installation
- The Mighty Mouse Computer company is considering whether or not to install a packaging robot. The robot initial cost $460,000, shipping cost $30,000 and installation $10,000. The robot can be depreciated using MACRS as a 5-year asset. (MACRS depreciation rates for a five-year asset: 20%, 32%, 19.2%, 11.52%, 11.52%, and 5.76%.) The robot is expected to last for five years, at which time management expects to sell it for parts for $100,000. The robot is expected to replace five employees in the shipping department, saving the company $150,000 each year. Mightys tax rate is 30%.
- What are the cash flows related to the acquisition of the packaging robot?
- What are the cash flows related to the disposition of the packaging robot?
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