Question

Trist Inc. is considering the purchase of a new loom to replace a less efficient one....

Trist Inc. is considering the purchase of a new loom to replace a less efficient one. The new machine will cost $240,000 including installation. The machine being replaced was purchased 5 years ago for $150,000 and is being depreciated as a 7-year MACRS property. It can be sold for $40,000. Compute the NINV for this project if Trist has a marginal tax rate of 35%. (Note: requires MACRS depreciation rates from the textbook)

            

            a. $225,000

            b. $202,287

            c. $239,000

            d. $218,000

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
O’Brien Inc. is considering the purchase of a new computer system (Mac) for $180,000. The system...
O’Brien Inc. is considering the purchase of a new computer system (Mac) for $180,000. The system will require an additional $20,000 for installation. If the new computer is purchased, it will replace an old system that has been fully depreciated. The new system will be depreciated over a period of 5 years using straight-line depreciation. If the Mac is purchased, the old system will be sold for $35,000. The Mac system, which has a useful life of 5 years, is...
Texas Tires is considering replacing an old machine with a new, more efficient, one.  The new machine...
Texas Tires is considering replacing an old machine with a new, more efficient, one.  The new machine will cost $1.2 million.  The old machine originally cost $714,000 4 years ago and was being depreciated straight line over a 7 year life.  The old machine can now be sold for $325,000. The firm has a 30 % tax rate.   Calculate the initial outlay on the new machine.
Canal Company is contemplating the purchase of a new leather sewing machine to replace the existing...
Canal Company is contemplating the purchase of a new leather sewing machine to replace the existing machine. The existing machine was purchased four years ago at an installed cost of $115,000; it was being depreciated under MACRS using a 5-year recovery period. The existing machine is expected to have a useful life of 5 more years. The new machine costs $203,000 and requires $8,000 in installation costs; it has a five-year useable life and would be depreciated under MACRS using...
Cobra Golf Co. is considering a proposal to replace an existing casting machine for producing a...
Cobra Golf Co. is considering a proposal to replace an existing casting machine for producing a new line of low quality golf clubs. The machine is expected to have a four year useful life and will be depreciated according to 3 year MACRS (0.25, 0.38, 0.37). The machine will cost the company $100,000 plus an installation cost of $30,000. Expanding the product line will increase the inventories by $10,000 initially. Projected EBT is $50,000 per year for next 4 years....
Cobra Golf Co.is considering a proposal to replace an existing casting machine for producing a new...
Cobra Golf Co.is considering a proposal to replace an existing casting machine for producing a new line of low quality golf clubs. The machine is expected to have a four-year useful life and will be depreciated according to 3-year MACRS (.25, .38, .37). The machine will cost the company $100,000 plus freight and installation costs of $20,000. The machine will be fully depreciated and will have an ending market value of $30,000. Expanding the product line will increase inventories by...
Meadville Widgets is considering the purchase of a fully automated widget finishing machine to replace an...
Meadville Widgets is considering the purchase of a fully automated widget finishing machine to replace an older but still functioning but more labor intensive model. The machine being replaced was purchased 5 years ago for a price of $45,000.00 at which time it had an expected life of 10 years. This machine is being depreciated by the straight line method with an anticiapated salvage value of $0.00 The current market value of this machine is estimated to be $27,000.00. The...
The ABD company is considering the purchase of a new machine to replace an out of...
The ABD company is considering the purchase of a new machine to replace an out of date machine that has a book value of $18000 and can be sold today for $2,000. The old machine is being depreciated on a straightline basis over 4 more years to a book value of $2000 at the end of the fourth year. The old machine generates annual revenues of $105000 and annual expenses of $75000. This machine requires a fixed investment of $5000...
A small factory is considering replacing an existing machine with a newer, more efficient one. Research...
A small factory is considering replacing an existing machine with a newer, more efficient one. Research and development costs associated with the replacement decision were $40,000 last year (2015). The existing machine was purchased three years ago at a cost of $230,000, and it is being fully depreciated according to a 5-year MACRs depreciation schedule. The current book value reflects that the firm has taken three years of depreciation. Because the company actively maintains its machinery and equipment, the CFO...
ABC Company is considering the purchase of a new machine for $65,000 installed. The machine will...
ABC Company is considering the purchase of a new machine for $65,000 installed. The machine will be depreciated by MACRS as 5 year property. The firm expects to operate the machine for 4 years and then to sell it for $12,750. If the marginal tax rate is 25.00%, what will the after–tax salvage value be when the machine is sold at the end of Year 4? Enter your answer rounded to two decimal places. Do not enter $ or comma...
ABC Company is considering the purchase of a new machine for $65,000 installed. The machine will...
ABC Company is considering the purchase of a new machine for $65,000 installed. The machine will be depreciated by MACRS as 5 year property. The firm expects to operate the machine for 4 years and then to sell it for $12,250. If the marginal tax rate is 25.00%, what will the after–tax salvage value be when the machine is sold at the end of Year 4? Enter your answer rounded to two decimal places. Do not enter $ or comma...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT