The Dauten Toy Corporation uses an injection molding machine that was purchased prior to the new tax legislation. This machine is being depreciated on a straight-line basis, and it has 6 years of remaining life. Its current book value is $2,100, and it can be sold for $2,600 at this time. Thus, the annual depreciation expense is $2,100/6 = $350 per year. If the old machine is not replaced, it can be sold for $500 at the end of its useful life. Dauten is offered a replacement machine which has a cost of $9,000, an estimated useful life of 6 years, and an estimated salvage value of $800. The replacement machine is eligible for 100% bonus depreciation at the time of purchase. The replacement machine would permit an output expansion, so sale would rise by $800 per year; even so, the new machine's much greater efficiency would cause operating expenses to decline by $1,000 per year. The new machine would require that inventories be increased by $2,500, but accounts payable would simultaneously increase by $800. Dauten's marginal federal- plus-state tax rate is 25%, and its WACC is 11%. What is the NPV of the incremental cash flow stream? Negative value, if any, should be indicated by a minus sign. Round your answer to the nearest cent. 24 Should the company replace the old machine? -Select-

43-44

A machine has a 1st cost of P 140,000 and a life of 8 years with a salvage value of P10,000 at the end of its useful life. Using double declining balance method   a. What is the Book Value on the 3rd year?   b. What is the depreciation charge in the 4th year?

You are evaluating two different silicon wafer milling machines. The Techron | costs $264,000, has a 3-year life, and has pretax operating costs of $71,000 per year. The Techron Il costs $460,000, has a 5-year life, and has pretax operating costs of $44,000 per year. For both milling machines, use straight-line depreciation to zero over the project's life and assume a salvage value of $48,000. If your tax rate is 22 percent and your discount rate is 12 percent, compute the EAC for both machines. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) > Answer is complete but not entirely correct. Techron I $ -134,840.83 Techron II $ -107,570.18

do fast

Lombard Company is contemplating the purchase of a new​ high-speed widget grinder to replace the existing grinder. The existing grinder was purchased 2 years ago at an installed cost of $57,400​; it was being depreciated under MACRS using a​ 5-year recovery period. The existing grinder is expected to have a usable life of 5 more years. The new grinder costs $103,300 and requires $5,200 in installation​ costs; it has a​ 5-year usable life and would be depreciated under MACRS using a​ 5-year recovery period. Lombard can currently sell the existing grinder for $69,900 without incurring any removal or cleanup costs. To support the increased business resulting from purchase of the new​ grinder, accounts receivable would increase by $40,800​, inventories by $29,900​, and accounts payable by $57,900. At the end of 5​ years, the existing grinder would have a market value of​ zero; the new grinder would be sold to net $28,600after removal and cleanup costs and before taxes. The firm is subject…

An oil refinery has decided to purchase some new drilling equipment for $440,000. The equipment will be kept for 7 years before being sold. The estimated SV for depreciation purposes is to be $18,000. Using the SL method, what is the BV at the end of the depreciable life? Choose the correct answer below. A. The BV at the end of the depreciable life is $36,000. B. The BV at the end of the depreciable life is $44,857. C. The BV at the end of the depreciable life is $18,000. D. The BV at the end of the depreciable life is $0.

A $150,000 asset has been depreciated with the straight-line method over an 8-year life. The estimated salvage value was $30,000. At the end of the fifth year, the asset was sold for $90,000. From a tax perspective, what is happening at the time of disposal and what is the dollar amount?

The average car depreciates in value about 15% per year. Suppose you buy a silver Cherolet Cruze LTZ worth $26,000 (and made no down payment). What is the value of the car if you bought it 4 years ago?

You are evaluating two different silicon wafer milling machines. The Techron I costs $270,000, has a 3-year life, and has pretax operating costs of $73,000 per year. The Techron II costs $470,000, has a 5-year life, and has pretax operating costs of $46,000 per year. For both milling machines, use straight-line depreciation to zero over the project's life and assume a salvage value of $50,000. If your tax rate is 24 percent and your discount rate is 10 percent, compute the EAC for both machines. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Techron I Techron II