Should the following be ignored, or rather added or subtracted from the new machine’s purchase price when estimating initial cash outflow? When estimating the machine’s depreciable basis? a. The old machine is saleable at S500 in the market. b. Book value of the old machine is $300, it still has 1 year of depreciable life and 2 years of useful life. c. Replacement of the old machine with the new one will require $ 1500 additional investment in inventory d. Shipment and installation of the new machine at the plant site will incur $ 400 e. Training of the machine operator will cost $ 350

Should the following be ignored, or rather added or subtracted from the new machine’s purchase price when estimating initial cash outflow? When estimating the machine’s depreciable basis? a. The old machine is saleable at S500 in the market. b. Book value of the old machine is $300, it still has 1 year of depreciable life and 2 years of useful life. c. Replacement of the old machine with the new one will require $ 1500 additional investment in inventory d. Shipment and installation of the new machine at the plant site will incur $ 400 e. Training of the machine operator will cost $ 350

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 21EA: Cinemar Productions bought a piece of equipment for $55,898 that will last for 5 years. The...

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