A manufacturing company has purchased a new machine for $400,000 with a lifetime of 10-years. The...

A manufacturing company has purchased a new machine for $400,000 with a lifetime of 10-years. The increased net income due to this machine is $90,000. The company’s tax rate is 40% and after-tax MARR is 12%. The company is planning to use the machine for 8 years and then sell it for $30,000. Develop tables using a spreadsheet to determine the after-tax cash flow for each year from 1 through 8. Calculate the after-tax PW and ERR after 8 years to determine whether this investment is profitable. Use MACRS- GDS depreciation for a 10-year property. Attach a screenshot of your spreadsheet for receiving credits.

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Melody Corporation purchased a machine for $400,000. This machine has a useful life of 10 years...

Melody Corporation purchased a machine for $400,000. This machine has a useful life of 10 years and an estimated salvage of $20,000. Depreciation was recorded on a straight-line basis for 7 years. After recording depreciation expense in the 7th year, Melody sold the machine for $100,000. (a) What is the carrying value of the machine at the point of sale? (10 pts) (b) How much gain or loss should Melody report on the sale? (6 pts). Clearly identify if the...

The value of a machine was $400,000 when purchased new one year ago. It has an...

The value of a machine was $400,000 when purchased new one year ago. It has an expected life of five years and the income statement shows the straight line depreciation rate as 20%. Using double declining balance depreciation, what is the value of the machine at the end of year two?

AZA Company purchased a machine on July 1, 2019. The machine cost $400,000 and has an...

AZA Company purchased a machine on July 1, 2019. The machine cost $400,000 and has an estimated residual value of $40,000. The expected useful life is 8 years. The machine is to be used for 100,000 machine hours. AZA’s year end is December 31. Required: a. Calculate the depreciation expense for 2019 and 2020 using the straight-line method. Also list the Accumulated Depreciation Balances at December 31, 2019 and December 31, 2020. b. Calculate the depreciation expense for 2019 and...

Company X purchased a new machine for 25000 $ by life span of 10 years, expecting...

Company X purchased a new machine for 25000 $ by life span of 10 years, expecting to earn 7500 $ as a yearly income from year 4 thereafter. It is assumed that its salvage value will be 31000$. Unexpectedly, from year 7 , annual income starting to decrease by 300$ , Moreover at the end of 9th year due to a big collapse in the company the machine will be going to get rid of the production line totally(useless). Determine...

Hanson Manufacturing Company purchased a machine for $1,060,000 at the beginning of 2018. The machine has...

Hanson Manufacturing Company purchased a machine for $1,060,000 at the beginning of 2018. The machine has an estimated useful life of five years and an estimated residual value of $270,000. The machine, which is expected to last 20,000 hours, was operated 3,000 hours in 2018 and 2,000 hours in 2019. REQUIRED: 1. Compute the annual depreciation for 2018 and 2019 under the following depreciation methods. You must show all of your work to receive any credit. (a) Straight-line: ...

Simpson Company purchased a new machine for $80,000 on January 1, 2017. The machine has an...

Simpson Company purchased a new machine for $80,000 on January 1, 2017. The machine has an expected salvage value of $5,000, and is expected to used 187,500 hours over its estimated useful life of 15 years. Actual hours used were 11,000 in 2017 and 13,000 in 2018. Determine the following: ________________ Depreciation expense for 2017 under the straight-line method ________________ Depreciation expense for 2018 under the straight-line method ________________ Book value at the end of 2018 under the straight-line method...

Two years ago, Sun company purchased a machine for $120,000. The company has learned that a...

Two years ago, Sun company purchased a machine for $120,000. The company has learned that a new machine is available for $145,000 today. It will be depreciated on a straight-line basis over 10 years and has no salvage value. Sun Company expects that the new machine will produce earnings of $45,000 per year for the next 10 years. The old machine is expected to produce earnings of $25,000 per year. The old machine is being depreciated on a straight-line basis...

Five years ago, your company purchased a machine used in manufacturing for $110,000. You have learned...

Five years ago, your company purchased a machine used in manufacturing for $110,000. You have learned that a new machine is available that offers many advantages; you can purchase it for $150,000 today. It will be depreciated on a straight-line basis over ten years and has no salvage value. You expect that the new machine will reduce the current investment in working capital by $10,000. The current machine is being depreciated on a straight-line basis over a useful life of...

Your company is undertaking a new project. A building was purchased 10 years ago for $500,000...

Your company is undertaking a new project. A building was purchased 10 years ago for $500,000 depreciated straight line to $50,000 (the land value) over 30 years. It is now worth $700,000 (including $50,000 land). The project requires improvements to the building of $60,000. The improvements are depreciated straight line to zero over the life of the project. The project will generate revenues of $325,000, $350,000, $375,000 and $400,000 for years 1-4, respectively. Annual cash operating expenses are $80,000, $100,000,...

Your company is undertaking a new project. A building was purchased 10 years ago for $750,000...

Your company is undertaking a new project. A building was purchased 10 years ago for $750,000 depreciated straight line to $150,000 (the land value) over 30 years. It is now worth $500,000 (including $150,000 land). The project requires improvements to the building of $100,000. The improvements are depreciated straight line to zero over the life of the project. The project will generate revenues of $325,000, $350,000, $375,000 and $400,000 for years 1-4, respectively. Annual cash operating expenses are $80,000, $100,000,...

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