Jellibean Corporation will replace one of its existing assets with a newer type. The existing asset was purchased two years ago at a cost of $30,000 and was being depreciated under MACRS using a five-year recovery period. This existing asset can be sold for $25,000. The new asset that they plan to buy will cost $75,000 and will also be depreciated under MACRS using a five-year recovery period. If the assumed tax rate is 40 percent on both ordinary income and capital gains, the initial investment will be equal to what amount after adjusting for taxes?

Q: Kenzie Company purchased a 3-D printer for $318,000. Although this printer is expected to last for…

A: Double declining depreciation rate = Straight line depreciation rate x 2 = (100/3 years) x 2 =…

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A: This is about evaluation of project

Q: Create a spreadshe

A: Terminal Cashflows represents project's last year's Cash Inflow at the end of the Economic life of…

Q: Prepare an incremental analysis for the 5 years showing whether Hancock should keep the existing…

A: Solution:- Step:-1 Calculation of Initial cash outflow Particulars Year 0 Value of the…

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A: Correct option is h. None of the above.   NPV of the Investment is $63,

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Q: Kenzie Company purchased a 3-D printer for $303,000. Although this printer is expected to last for…

A: Straight line depreciation rate=100%Estimated useful life=100%3 years=33.33%

Q: On January 1, 2018 Crane Company will acquire a new asset that costs $400,000 and that is…

A: Calculate the old equipment’s after-tax sales value.

Q: You have been asked by the president of your company to evaluate the proposed acquisition of a new…

A: Terminal value is calculated by adding the salvage value after-tax and the working capital…

Q: Alfredo Company purchased a new 3-D printer for $900,000. Although this printer is expected tolast…

A: 1. Depreciation Expenses - Depreciation Expenses are the expense incurred on the wear and tear of…

Q: You have been asked by the president of your company to evaluate the proposed acquisition of a new…

A: PV of cash inflows= Annual cash flows*Present value annuity factor+Salvage value after tax* Present…

Q: A used machine, which had an initial cost of $70,000, was purchased by Company A for $50,000. The…

A: Depreciation means the fall in value of assets due to wear and tear or usage or change in…

Q: Twelve years ago, an industrial facility bought a boring machine for P65,000. The estimated life of…

A: Solution: Balance in depreciation reserve = (P65,000*12/25) = P31,200 Amount to be received on sale…

Q: You have been asked by the president of your company to evaluate the proposed acquisition of a new…

A: MACRS 3 YEAR CLASS RATES: 1st year :33.33% 2nd year:44.45% 3rd year:14.81%

Q: You must evaluate the purchase of a spectrometer for the R&D department. The base price is…

A: Computation of initial outlay: Hence, the initial outlay is $178,000.

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A: Given information: Cost of 3D printer =$402,000 Salvage value = 30,000 Life = 3 years   In the…

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A: NOTE: Hi! Thank you for the question, As per the honor code, we are allowed to answer three…

Q: Alfredo Company purchased a new 3-D printer for $850,000. Although this printer is expected to last…

A: Depreciation expense = (Cost - Salvage value) / Useful life

Q: Damon Corporation, a sports equipment manufacturer, has a machine currently in use that was…

A: Operating Cash Flow: The amount of cash created by a company's typical business operations is…

Q: Benson Enterprises is deciding when to replace its old machine. The machine’s current salvage value…

A: The question is based on the concept of project valuation.

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A: Here, Cost of new machine = $44,300 Installation costs = $1,500 Salvage value of old machine = 2,200…

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A: Depreciation expenses are used to reduce the value of fixed assets. It can be calculated by using…

Q: The Ingersoll Engineering Company is considering the purchase of a gas flow meter. Its purchase…

A: Cash flow is the net amount of cash and cash equivalents being transferred into and out of business.

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A: Answer - Working Note :  Calculation of amount of gain or loss to be included in the Income…

Q: On December 1, 2021, HP Corp. is contemplating to invest into a new equipment costing P2,500,000…

A: The question is related to Capital Budgeting. The details are given regarding replacement of old…

Q: ABC Printing Corporation is considering purchasing a new printing machine. The following information…

A: Hi there, thanks for posting the questions. But as per our Q&A guidelines, we must answer the…

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A: Before investing in new projects or assets, profitability of the project is evaluated by using…

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A: The calculation of NPV is done below:

Q: Holmes Manufacturing is considering a new machine that costs $250,000 and would reduce pretax…

A: Net present value is the difference of discounted cash outflows and cash inflows.

Q: You have been asked by the president of your company to evaluate the proposed acquisition of a new…

A: Initial Investment The initial investment means cost of purchase plus  working capital required.…

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A: Depreciation is an accounting method in which assets are gone through wear and tear over time and…

Q: Arvada Co. is considering the purchase of equipment that would allow the company to add a new…

A: Capital budgeting is used to evaluate the projects. With the help of capital budgeting, the…

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A: Depreciation means the loss in value of assets because of usage of assets , passage of time or…

Q: Dell is considering replacing one of its material handling systems. The old system was purchased 7…

A: a.Calculation of cash flow of both alternatives using cash flow approach (insider’s viewpoint…

Q: A contractor can buy dump trucks for ₱ 800,000 each or rent them for ₱ 1,200 per truck per day. The…

A: Solution- (A)-EAC=NPV/At,rwhereA=The present value of an annuity factort=Number of periodsr=Interest…

Q: On December 1, 2021, HP Corp. is contemplating to invest into a new equipment costing P2,500,000…

A: New Equipment Purchase Cost = P2,500,000 Installation cost = P200,000 Total Cost = Purchase cost +…

Q: Mom’s Cookies, Inc., is considering the purchase of a new cookie oven. The original cost of the old…

A: Hence, cash outflows are $9,975 which is determined by subtracting initial price of the new project…

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Q: Kenzie Company purchased a 3-D printer for $345,000. Although this printer is expected to last for…

A: Depreciation rate = (100% / 3 years)*2                              = 66.67%

Q: d useful life of 6 years, and an estimated salvage value of $800. This machine falls into the MACRS…

A: Calculation of depreciation : Original cost − Salvage Value / Useful life…

Q: mpany purchased a 3-D printer for $411,000. Although this printer is expected to last for ten years,…

A: Double Declining method of depreciation: It is a method in which assets are depreciated at twice the…

Q: Delaney Company is considering replacing equipment that originally cost $600,000 and has accumulated…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Tucker Enterprise Inc. is considering a project that requires a numerically controlled (NC) machine…

A: The cost of goods sold amounting to $20,000 shall not be considered because the gross income is…

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A: The net investment required to replace the existing machine will be difference of value of new…

Q: Kenzie Company purchased a 3-D printer for $444,000. Although this printer is expected to last for…

A: Fixed assets: These are the assets which were used in the business for more than one year. These…