iSooky has a spotter truck with a book value of $52,000 and a remaining useful life of 5 years. At the end of the five years the spotter truck will have a zero salvage value. The market value of the spotter truck is currently $38,000. iSooky can purchase a new spotter truck for $132,000 and receive $32,200 in return for trading in its old spotter truck. The new spotter truck will reduce variable manufacturing costs by $26,200 per year over the five-year life of the new spotter truck. The total increase or decrease in income by replacing the current spotter truck with the new truck (ignoring the time value of money) is:

The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $1,000,000, and it would cost another $20,000 to install it. The machine falls into the MACRS 3-year class (the applicable MACRS depreciation rates are 33.33%, 44.45%, 14.81%, and 7.41%), and it would be sold after 3 years for $576,000. The machine would require an increase in net working capital (inventory) of $15,500. The sprayer would not change revenues, but it is expected to save the firm $424,000 per year in before-tax operating costs, mainly labor. Campbell's marginal tax rate is 35%. Cash outflows, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the nearest dollar.   What is the Year-0 net cash flow? $    If the project's cost of capital is 11 %, what is the NPV of the project? $

Emerson, Inc. is evaluating whether to replace a machine. The current machine was purchased 3 years ago for $6,000 and falls into the MACRS 3-year class. It has 3 years of remaining life and a $600 salvage value three years from now. The current market value of the older machine is $2,000. Alternatively, the company could purchase a new machine for $11,600. Delivery of the new machine would cost $200 and installation would cost $200. The new machine is expected to increase inventory needs by $800, and accounts payable is expected to increase by $600. The new machine falls in the MACRS 3-year class, has a 3-year economic life and a salvage value at the end of 3 years of $7,000. It is expected to increase revenue by $3,500 per year and is expected to decrease costs by $2,500 per year. The firm has a 40 % tax rate and a cost of capital of 12%. The MACRS 3-year class uses the following percentages: 33%, 45%, 15%, and 7% (in that order). (Round all CFs to the nearest dollar.) Should the…

Bumps Unlimited, a highway contractor, must decide whether to overhaul a tractor and scraper or replace it. The old equipment was purchased 5 years ago for $130,000; it had a 12-year projected life. If traded for a new tractor and scraper, it can be sold for $60,000. Overhauling the equipment will cost $20,000. If overhauled, O&M cost will be $25,000/year and salvage value will be negligible in 7 years. If replaced, a new tractor and scraper can be purchased for $150,000. O&M costs will be $12,000/year. Salvage value after 7 years will be $35,000. Using a 15% MARR and an annual worth analysis, should the equipment be replaced?

A small strip mining cola company is trying to decide whether it should purchase or lease a new clamshell. If purchased, the shell will cost $150,000 and is expected to have a $65,000 salvage value after 6 years. Alternatively, the company can lease a clamshell for $20,000 per year, but the lease payment will have to be made at the beginning of each year. If the clamshell is purchased, it will be leased to other strip-mining companies whenever possible, an activity that is expected to yield revenue of $12,000 per year. If the company’s MARR is 15% per year, should the clamshell be purchased or leased on the basis of future worth analysis. (Enter the FW value of the selected alternative with proper positive or negative sign)

Builtrite is considering the purchase of a new five-year machine worth $90,000. It will cost another $10,000 to install the machine and Builtrite will need to keep an extra $9,000 in inventory on hand due to the machine's efficiency. The current machine being used is 5 years old and originally cost $60,000 and is being depreciated down to zero over a 10-year period. If the current machine were sold today, it could be sold for $45,000. In five years, the new machine is estimated to have a salvage value of $36,000. Two employees will need to be trained for the new machine at a cost of $4000. The new machine is expected to produce $80,000 in annual savings. Builtrite is in the 34% tax bracket. What is the terminal cash flow for the new machine? O $23.760 O $31,800 O $32,760

Meman

Roadrunner Freight Company owns a truck that cost $42,000. Currently, the truck’s book value is $24,000, and its expected remaining useful life is four years. Roadrunner has the opportunity to purchase for $31,200 a replacement truck that is extremely fuel efficient. Fuel cost for the old truck is expected to be $6,000 per year more than fuel cost for the new truck. The old truck is paid for but, in spite of being in good condition, can be sold for only $14,400.RequiredCalculate the total relevant costs. Should Roadrunner replace the old truck with the new fuel-efficient model, or should it continue to use the old truck until it wears out?

DeYoung Entertainment Enterprises is considering replacing the latex molding machine it uses to fabricate rubber chickens with a newer, more efficient model. The old machine has a book value of $450,000 and a remaining useful life of 5 years. The current machine would be worn out and worthless in 5 years, but DeYoung can sell it now to a Halloween mask manufacturer for $135,000. The old machine is being depreciated by $90,000 per year for each year of its remaining life. If DeYoung doesn't replace the old machine, it will have no salvage value at the end of its useful life. The new machine has a purchase price of $775,000, an estimated useful life and MACRS class life of 5 years, and an estimated salvage value of $105,000. The applicable depreciation rates are 20.00%, 32.00%, 19.20%, 11.52%, 11.52%, and 5.76%. Being highly efficient, it is expected to economize on electric power usage, labor, and repair costs, and, most importantly, to reduce the number of defective chickens. In total,…

Builtrite is considering purchasing a new machine that would cost $60,000 and the machine would be depreciated (straight line) down to $0 over its five-year life. At the end of four years, it is believed that the machine could be sold for $30,000. The current machine being used was purchased 3 years ago at a cost of $40,000 and it is being depreciated down to zero over its 5-year life. The current machine's salvage value now is $12,000. The new machine would increase EBDT by $56,000 annuall Builtrite's marginal tax rate is 34%. What is the TCF associated with the purchase of this new machine if it is sold at the end of year 4? Ⓒ$30,000 $23,880 $20,500 $19,800