1. You purchased a machine for $ 1.16 million three years ago and have been applying straightline depreciation to zero for a sevenyear life. Your tax rate is 38 %. If you sell the machine today (after three years of depreciation) for $ 775 000 what is your incremental cash flow from selling the machine? Your total incremental cash flow will be $ nothing. (Round to the nearest cent.)
2. Daily Enterprises is purchasing 10.3 million machines. It will cost 54,000 to transport and install the machine. The machine has a depreciable life of five years using straightline depreciation and will have no salvage value. The machine will generate incremental revenues of:
3. You have just completed a 15,000 feasibility study for a new coffee shop in some retail space you own. You bought the space two years ago for $97,000, and if you sold it today, you would net 110,000 after taxes. Outfitting the space for a coffee shop would require a capital expenditure of $30,000 plus an initial investment of $4,700 in inventory. What is the correct initial cash flow for your analysis of the coffee shop opportunity?
Identify the relevant incremental cash flows below: (Select all the choices that apply.)
These are the correct answers :
A. Capital expenditure to outfit the space.
C. The amount you would net after taxes should you sell the space today.
E.The initial investment in inventory.
I need an answer to this part :
Calculate the initial cash flow below: (Select from the dropdown menus and round to the nearest dollar.)
1 
Capital Expenditure (outfit of space). . . . 
$ 

2 
Capital Expenditure (the price of space). . . . 
$ 

3 
Feasibility Study Cost. . . . . . . . . . . . . . . . 
$ 

4 
Free Cash Flow 
$ 
Question 1
Depreciation as per SLM  purchase price  scrap value/ usefull life .
$11600000 /7 = $ 165714
Depreciation for past 3 years= $165714× 3 =$497142
So , the book value of machine on date of sale that is today  purchase price  accumulated depreciation
$1160000$497142 = $662858
Gain on sale  selling price  book value
775000662858 = 112142
Now, tax on gain is  $112142× 38% = 42614
So the incremental cash flow from selling the machine = gain  tax
11214242614 = $69528
Since , you have asked multiple questions, we will solve the first for you, i have explained well ques 1 . Please feel free to ask any doubt by leaving a comment in comment box. Thank you !!
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