A new CNC machine is purchased for $40,000. The salvage value of the CNC machine is expected to be 15% of the initial cost. The CNC machine qualifies for 3-year GDS MACRS depreciation. What is the book value of the CNC machine after two years of depreciation

Daily Enterprises is purchasing a $10.0 million machine. It will cost $50,000 to transport and install the machine. The machine has a depreciable life of five years and will have no salvage value. If Daily uses straight-line depreciation, what are the depreciation expenses associated with this machine? The yearly depreciation expenses are $ (Round to the nearest dollar.)

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The Darlington Equipment Company purchased a machine5 years ago at a cost of $85,000. The machine had an expected life of 10 years at thetime of purchase, and it is being depreciated by the straight-line method by $8,500per year. If the machine is not replaced, it can be sold for $15,000 at the end of itsuseful life.A new machine can be purchased for $170,000, including installation costs. Duringits 5-year life, it will reduce cash operating expenses by $40,000 per year. Sales are notexpected to change. At the end of its useful life, the machine is estimated to be worthless.MACRS depreciation will be used, and the machine will be depreciated over its 3-year classlife rather than its 5-year economic life, so the applicable depreciation rates are 33%, 45%,15%, and 7%.The old machine can be sold today for $55,000. The firm’s tax rate is 40%. The appropriateWACC is 9%.a. If the new machine is purchased, what is the amount of the initial cash flow atYear 0?b. What are the incremental cash…

a. A new operating system for an existing machine is expected to cost $837,000 and have a useful life of six years. The system yields an incremental after-tax income of $245,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $105,000. b. A machine costs $570,000, has a $58,000 salvage value, is expected to last eight years, and will generate an after-tax income of $155,000 per year after straight-line depreciation. Assume the company requires a 10% rate of return on its investments. Compute the net present value of each potential investment. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Complete this question by entering your answers in the tabs below. Required A Required B A new operating system for an existing machine is expected to cost $837,000 and have a useful life of six years. The system yields an incremental after-tax income of $245,000 each year after deducting its…

A proposal to buy a new machine to manufacture a new product submitted by the Production Department follows: The new machine cost P1,800,000 with an estimated life of five years and with a salvage value of P500,000 will be depreciated using the Sum of Year's Digit method (SYD). Freight and installation costs are estimated to be P350,000. This machine can be sold for P400,000 after its estimated life. With this machine, P1,250,000 sales will be generated and P550,000 cash expenses will be incurred every year. The expected rate of return of this project is 11% and corporate tax is 25%.   Compute the following: A. Net Cash Outlay (Net Investment Cost) B. Net Cash Inflows (Cash Returns) With solution

An injection moulding machine was purchased 2 years ago. The machine has been depreciated on a straight-line basis with $500 salvage value, and it has 6 years of remaining life. Its current book value is $2,600, and it can be sold for $3,000 at this time. Assume, for ease of calculation, that the annual depreciation expense is $350 per year. The firm is offered a replacement machine which has a cost of $8,000 an estimated useful life of 6 years, and an estimated salvage value of $800. This machine falls into the MACRS 5-year class (20%, 32%, 19%, 12%, 12%, 5%). The replacement machine would permit an output expansion, so sales would rise by $1,000 per year; even so, the new machine would cause operating expenses to decline by $1,500 per year. The machine would require that inventories be increased by $2,000 but accounts payable would simultaneously increase by $500. The firm’s marginal federal-plus-state tax rate is 40 percent, and its cost of capital is 15 percent. Should it replace…

A computer system can be purchased for $18,000. The operating costs will be $10,000 per year, and the useful life is expected to be 5 years with a $5,000 salvage value at that time. The present annual sales volume should increase by $16,000 as a result of acquiring the system. Assume the company's tax rate is 50%. Using a straight-line deprecation method, compute annual taxes and IRR for the investment. Rework the previous problem assuming (i) the system's taxable life is 8 years with a salvage value of $2,000, but that (ii) the company still salvages the system after 5 years for $5,000. Describe how this may affect cash flow in the forthcoming years.

2. A new boiler was installed by a textile plant at a cost of P3,000,000 and projected to have a useful life of 15years. At the end of its useful life, it is estimated to have a salvage value of P300,000. Determine its capitalized cost if interest is 18% compounded annually.

A P 150, 000 printing machine was purchased three years ago and will last five more years with a scrap value of P 11, 500. Construct a depreciation table if depreciation method uses the Sinking Fund Method with i = 12%.