The equipment cost (equipment plus shipping and installation) can be depreciated at the rate of 21%...

The equipment cost (equipment plus shipping and installation) can be depreciated at the rate of 21% in the first year. For the remaining 5 years (years 2-6) the depreciation will be equal to $30,000 per year. What is the amount of depreciation in year 1?

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• The required equipment would cost $160,000, plus an additional $35,000 for shipping and installation. •...

• The required equipment would cost $160,000, plus an additional $35,000 for shipping and installation. • In addition, inventories would rise by $26,000, while accounts payable would go up by $6,000. All of these costs would be incurred at Year 0. (In other words, increase net working capital is $25,000) • By a special ruling, the machinery could be depreciated under the MACRS system as 3-year property. Year 1 : 33%, Year 2: 45%, Year 3: 15%, Year 4: 7%...

Years 0 1 2 3 4 Investment Outlay Equipment cost ($350,000) Shipping and installation ($70,000)...

Years 0 1 2 3 4 Investment Outlay Equipment cost ($350,000) Shipping and installation ($70,000) Increase in inventory ($55,000) Increase in accounts payable $18,000 Total initial investment ($457,000) Operating cash flow $ 113,990 $ 96,350 $ 140,450 $ 152,210 Total termination cash flow $ 53,250 Project Cash Flows Net cash flows ($457,000) $113,990 $96,350 $140,450 $205,460 Required return (used as the discount rate) 12% Payback period (2.22) Present value of net cash inflows Present value of cash outflows Profitability...

ABC, Inc. purchased an equipment at time=0 for $53,474. The shipping and installation costs were $23,977....

ABC, Inc. purchased an equipment at time=0 for $53,474. The shipping and installation costs were $23,977. The equipment is classified as a 5-year MACRS property. The investment in net working capital at time=0 was $5,040 which would be recouped at the end of the project. The project life is five years. At the end of the fifth year, the company will sell the equipment for $43,842. The annual cash flows are $43,724. What is the cash flow of the project...

An equipment was purchased by a Company at the cost of $875,000. It was depreciated for...

An equipment was purchased by a Company at the cost of $875,000. It was depreciated for five years on a straight-line basis to zero-salvage value. The market value of this equipment is $85,000. Tax rate applicable to this Company is 40%. Calculate the After-tax Salvage value. a. 585.000 b. 5121,000 c. 590,000 d. 551,000

Equipment Cost $134,000 Installation Labor $4,500 Freight $10,000 Repairs of Damage during installation $6,000 Insurance on...

Equipment Cost $134,000 Installation Labor $4,500 Freight $10,000 Repairs of Damage during installation $6,000 Insurance on Freight $1,500 Estimated Salvage Value $20,000 Useful LIfe 8 years Each question is independent from the others. Answer using the information above. 1. What is the book value after 3 years of depreciation, using straight line? 2.What is the accumulated depreciation after 3 years, using double declining balance? 3. What is the depreciable value of the asset? 4. Assuming straight line depreciation, at the...

A. An equipment installation job in the completion stage can be completed in 40 days of...

A. An equipment installation job in the completion stage can be completed in 40 days of 8 hour day work, with 40 men working. With the contract expiring in 30 days, the mechanical engineer contractor decided to add 10 men on the job, overtime not being permitted. If the liquidated damages is $2,000 per day of delay, and the men are paid $80 per day, will the engineer be able to complete the job on time? How much should he...

Your company is planning a $216,000 to invest in new equipment. This cost will be depreciated...

Your company is planning a $216,000 to invest in new equipment. This cost will be depreciated on a straight-line basis over a 4-year period. They can salvage it for $45,000. You need to invest $40,000 in new Net Working Capital, which will be returned at the end of the project. The new equipment is expected to generate $489,000 in additional annual sales. Costs are 46% of sales. The tax rate is 34%. 19)What is the Cash Flow From Assets for the last...

Mace Company acquired equipment that cost $60,000, which will be depreciated on the assumption that the...

Mace Company acquired equipment that cost $60,000, which will be depreciated on the assumption that the equipment will last six years and have a $4,000 residual value. Component parts are not significant and need not be recognized and depreciated separately. Several possible methods of depreciation are under consideration. Required: 1. Prepare a schedule that shows annual depreciation expense for the first two years, assuming the following (Round your answer to nearest whole dollar.): Declining-balance method, using a rate of 30%....

Part A A new project has an initial cost of $142,000. The equipment will be depreciated...

Part A A new project has an initial cost of $142,000. The equipment will be depreciated on a straight-line basis to a book value of $45,000 at the end of the four-year life of the project. The projected net income each year is $14,300, $17,600, $22,400, and $14,200, respectively. What is the average accounting return? Part B You are evaluating two projects with the following cash flows: Year Project X Project Y 0 −$540,600 −$511,000 1 219,700 209,400 2 229,600...

A shipping company believes that the variation in the cost of a customer’s shipment can be...

A shipping company believes that the variation in the cost of a customer’s shipment can be explained by differences in the weight of the package being shipped. To investigate whether this relationship is useful, a random sample of 20 customer shipments was selected, and the weight (in lb.) and the cost (in dollars, rounded) for each shipment were recorded. The following results were obtained: Weight (lbs.) Cost (Dollars) 8 11 6 8 5 11 7 11 12 17 9 11...

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