winnebagel Corp currently sells 29200 motor homes
CSM Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $433,000 is estimated to result in $163,000 in annual pretax cost savings. The press falls in the MACRS five-year class (MACRS Table), and it will have a salvage value at the end of the project of $64,000. The press also requires an initial investment in spare parts inventory of $16,900, along with an additional $3,900 in inventory for each succeeding year of the project. The shop's tax rate is 24 percent and its discount rate is 11 percent. Calculate the depreciation for each year of the project. (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) Depreciation Year 1 Year 2 Year 3 Year 4 Calculate the aftertax salvage value for the equipment at the end of the project. (Do no round intermediate calculations and round your answer to the nearest whole number e.a.. 32. - Making Capital Investment Dec... i Saved Help Sa Your firm is contemplating the purchase of a new $555,000 computer-based order entry system. The system will be depreciated straight-line to zero over its 7-year life. It will be worth $84,000 at the end of that time. You will save $197,000 before taxes per year in order processing costs, and you will be able to reduce working capital by $53,000 at the beginning of the project. Working capital will revert back to normal at the end of the project. The tax rate is 23 percent. What is the aftertax salvage value of the equipment? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Aftertax salvage value What is the annual operating cash flow? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) OCF CSM Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $433,000 is estimated to result in $163,000 in annual pretax cost savings. The press falls in the MACRS five-year class (MACRS Table), and it will have a salvage value at the end of the project of $64,000. The press also requires an initial investment in spare parts inventory of $16,900, along with an additional $3,900 in inventory for each succeeding year of the project. The shop's tax rate is 24 percent and its discount rate is 11 percent. Calculate the depreciation for each year of the project. (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) Depreciation Year 1 Year 2 Year 3 Year 4 Calculate the aftertax salvage value for the equipment at the end of the project. (Do no round intermediate calculations and round your answer to the nearest whole number e.a.. 32. - Making Capital Investment Dec... i Saved Help Sa Your firm is contemplating the purchase of a new $555,000 computer-based order entry system. The system will be depreciated straight-line to zero over its 7-year life. It will be worth $84,000 at the end of that time. You will save $197,000 before taxes per year in order processing costs, and you will be able to reduce working capital by $53,000 at the beginning of the project. Working capital will revert back to normal at the end of the project. The tax rate is 23 percent. What is the aftertax salvage value of the equipment? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Aftertax salvage value What is the annual operating cash flow? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) OCF
