Your company is considering investing in a new asset that costs $185,500. The old asset, which has a book value of $100,000, can be sold for $100,000. The purchase price of the old asset was $450,000. The new asset will allow you to keep less inventory on hand. You believe that you will be able to reduce your inventory by $6,000. What is the net cash outlay for this asset? I

Income tax rate = 30%

Capital gains tax rate = 15%

(Please use Excel)

PROBLEM 1
Inputs
Cost of New Asset
Installation Costs
Old Asset
Book Value
Proceeds on Sale
Initial Purchase Price
Capital Gains Tax Rate
Ordinary Income Tax Rate
Decrease in Working Capital
Outputs
Cash Distribution Table	Distribution	Tax Effects
Book Value
Capital Gain
Capital Loss
Recaptured Depreciation
Proceeds on Sale
Cost of New Asset
Installation Costs
Proceeds on Sale,Old Asset
Taxes on Proceeds on Sale
Decrease in Working Capital
Net Cash Outlay