Question
In: Accounting
An injection molding machine can be purchased and installed for $90,000. It is in the seven-year...
An injection molding machine can be purchased and installed for $90,000. It is in the seven-year GDS property class and is expected to be kept in service for eight years. It is believed that $10,000 can be obtained when the machine is disposed of at the end of year eight. The net annual value added (i.e., revenues less expenses) that can be attributed to this machine is constant over eight years and amounts to $15,000. An effective income tax rate of 40% is used by the company, and the after-tax MARR equals 15% per year.
What is the MV of the investment at end of year 4?
What is the PW of the investment? Hint, it is negative
Solutions
ekkarill92 answered 2 years agoRelated Solutions
The Dauten Toy Corporation uses an injection molding machine that was purchased prior to the new...
The Dauten Toy Corporation uses an injection molding machine
that was purchased prior to the new tax legislation. This machine
is being depreciated on a straight-line basis, and it has 6 years
of remaining life. Its current book value is $2,400, and it can be
sold for $2,600 at this time. Thus, the annual depreciation expense
is $2,400/6 = $400 per year. If the old machine is not replaced, it
can be sold for $500 at the end of its...
The Dauten Toy Corporation uses an injection molding machine that was purchased prior to the new...
The Dauten Toy Corporation uses an injection molding machine
that was purchased prior to the new tax legislation. This machine
is being depreciated on a straight-line basis, and it has 6 years
of remaining life. Its current book value is $2,400, and it can be
sold for $2,500 at this time. Thus, the annual depreciation expense
is $2,400/6 = $400 per year. If the old machine is not replaced, it
can be sold for $500 at the end of its...
The Dauten Toy Corporation uses an injection molding machine that was purchased prior to the new...
The Dauten Toy Corporation uses an injection molding machine
that was purchased prior to the new tax legislation. This machine
is being depreciated on a straight-line basis, and it has 6 years
of remaining life. Its current book value is $2,400, and it can be
sold for $2,500 at this time. Thus, the annual depreciation expense
is $2,400/6 = $400 per year. If the old machine is not replaced, it
can be sold for $500 at the end of its...
The Dauten Toy Corporation uses an injection molding machine that was purchased prior to the new...
The Dauten Toy Corporation uses an injection molding machine
that was purchased prior to the new tax legislation. This machine
is being depreciated on a straight-line basis, and it has 6 years
of remaining life. Its current book value is $2,100, and it can be
sold for $2,500 at this time. Thus, the annual depreciation expense
is $2,100/6 = $350 per year. If the old machine is not replaced, it
can be sold for $500 at the end of its...
The Dauten Toy Corporation uses an injection molding machine that was purchased prior to the new...
The Dauten Toy Corporation uses an injection molding machine
that was purchased prior to the new tax legislation. This machine
is being depreciated on a straight-line basis, and it has 6 years
of remaining life. Its current book value is $2,400, and it can be
sold for $2,600 at this time. Thus, the annual depreciation expense
is $2,400/6 = $400 per year. If the old machine is not replaced, it
can be sold for $500 at the end of its...
The Dauten Toy Corporation uses an injection molding machine that was purchased prior to the new...
The Dauten Toy Corporation uses an injection molding machine
that was purchased prior to the new tax legislation. This machine
is being depreciated on a straight-line basis, and it has 6 years
of remaining life. Its current book value is $2,400, and it can be
sold for $2,600 at this time. Thus, the annual depreciation expense
is $2,400/6 = $400 per year. If the old machine is not replaced, it
can be sold for $500 at the end of its...
The Dauten Toy Corporation uses an injection molding machine that was purchased prior to the new...
The Dauten Toy Corporation uses an injection molding machine
that was purchased prior to the new tax legislation. This machine
is being depreciated on a straight-line basis, and it has 6 years
of remaining life. Its current book value is $2,100, and it can be
sold for $2,500 at this time. Thus, the annual depreciation expense
is $2,100/6 = $350 per year. If the old machine is not replaced, it
can be sold for $500 at the end of its...
The Dauten Toy Corporation uses an injection molding machine that was purchased prior to the new...
The Dauten Toy Corporation uses an injection molding machine
that was purchased prior to the new tax legislation. This machine
is being depreciated on a straight-line basis, and it has 6 years
of remaining life. Its current book value is $2,100, and it can be
sold for $2,400 at this time. Thus, the annual depreciation expense
is $2,100/6 = $350 per year. If the old machine is not replaced, it
can be sold for $500 at the end of its...
The Dauten Toy Corporation uses an injection molding machine that was purchased prior to the new...
The Dauten Toy Corporation uses an injection molding machine
that was purchased prior to the new tax legislation. This machine
is being depreciated on a straight-line basis, and it has 6 years
of remaining life. Its current book value is $2,400, and it can be
sold for $2,500 at this time. Thus, the annual depreciation expense
is $2,400/6 = $400 per year. If the old machine is not replaced, it
can be sold for $500 at the end of its...
The Dauten Toy Corporation uses an injection molding machine that was purchased prior to the new...
The Dauten Toy Corporation uses an injection molding machine
that was purchased prior to the new tax legislation. This machine
is being depreciated on a straight-line basis, and it has 6 years
of remaining life. Its current book value is $2,100, and it can be
sold for $2,500 at this time. Thus, the annual depreciation expense
is $2,100/6 = $350 per year. If the old machine is not replaced, it
can be sold for $500 at the end of its...
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