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U company purchased a machine 2 years ago for a total cost of $180,000 and it will be replaced by a new one. It was
U company purchased a machine 2 years ago for a total cost of $180,000 and it will be replaced by a new one. It was depreciated 20% in year 1 and 32% in year 2. It could be sold now for $110,000. A new machine has a base price of $250,000 and would require $3,000 in transportation cost. It would also require an additional inventory of $15,000. Depreciation schedule for the first three years of the new machine's life is: year 1 = 20%, year 2 = 32%, and year 3 = 19%, Compute: a. Initial outlay for the new machine. b. Book value of the new machine after 3 years
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