Question
In: Accounting
It is required to install a new computer control system. This new computer control system could...
It is required to install a new computer control system. This new computer control system could be purchased at a cost of $125,000. The project working life of this system is 05 years with a salvage value of $50,000. The working capital investment is $23,331 for this project. The annual labor savings due to this project will be $100,000.
Additional annual expenses involve labor expense of $20,000, Material expense of $12,000 & Overhead expense of $8,000.
- Use Straight Line Depreciation method to calculate the depreciation amount for each year.
- Develop the income statement for this project given an applied income tax of 40%.
- Develop the cash flow statement for this project.
- Draw the cash flow diagram for this project.
- Is this project justifiable at an MARR of 15%?
Solutions
ekkarill92 answered 1 year agoRelated Solutions
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