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Calculating initial investment Dufree Coffee Roasters, Inc., wishes to expand and modernize its faciles. The installed cost of a proposed computer controlled automatic feed roaster will be $127.000 The firm has a DuPren is subject to a 40% xa chance to sell its 5-year-okt reaster for $34 300 The existing master originally cost 350,200 and was being depreciated using MACRS) and a 7-year recovery poriad (see the tabl a. What is the book value of the existing roaster? b. Calculate the after tax proceeds of the sale of the existing coaster e. Calculate the change in not working capitol using the following figures Anticipated Changes in Current Assets and Current Liabilities Accruals Inventory Accounts payable Accounts receivable Cash -$21.000 50,100 40.300 +69.400 0 GID a: The remaining book value of the existing roaster is oond to the nearest b. The after tax proceeds of the sale of the existing master will be & c. The change in networking capital wit be 5 Round to the nearest dollar) d. The initial investment associated with the proposed new roaster will be found to the dar) Round to the nearest dofar CAME TO HIM wwwvwwviny... b. Calculate the after-tax proceeds of the sale of the existing roaster. c. Calculate the change in net working capital using the following figures: Anticipated Changes in Current Assets and Current Liabilities Accruals Inventory Accounts payable Accounts receivable -$21,000 + 50,100 + 40,300 +69,400 Cash Notes payable d. Calculate the initial investment associated with the proposed new roaster. 0 + 14,900 a. The remaining book value of the existing roaster is S (Round to the nearest dollar) b. The after-tax proceeds of the sale of the existing roaster will be S c. The change in net working capital will be S d. The initial investment associated with the proposed new roaster will be S (Round to the nearest dollar) (Round to the nearest dollar) (Round to the nearest oaster sale d pital u Asset ng roa me exis bes the pro Rounded Depreciation Percentages by Recovery Year Using MACRS for First Four Property Classes Recovery year 1 2 3 4 5 6 7 8 9 10 11 Totals 3 years 33% 45% 15% 7% Percentage by recovery year" 5 years 20% 32% 19% 12% 12% 5% 7 years 14% 25% 18% 12% 9% 9% 9% 4% 10 years 10% 18% 14% 12% 95 8% 7% 6% 6% 6% 45 100% 100% 100% 100% These percentages have been rounded to the nearest whole percent to simplify calculations while retaining realism To calculate the actual depreciation for tax purposes, be sure to apply the actual unrounded percentages or directly apply double-declining balance (200%) depreciation using the half-year Calculating initial investment Dufree Coffee Roasters, Inc., wishes to expand and modernize its faciles. The installed cost of a proposed computer controlled automatic feed roaster will be $127.000 The firm has a DuPren is subject to a 40% xa chance to sell its 5-year-okt reaster for $34 300 The existing master originally cost 350,200 and was being depreciated using MACRS) and a 7-year recovery poriad (see the tabl a. What is the book value of the existing roaster? b. Calculate the after tax proceeds of the sale of the existing coaster e. Calculate the change in not working capitol using the following figures Anticipated Changes in Current Assets and Current Liabilities Accruals Inventory Accounts payable Accounts receivable Cash -$21.000 50,100 40.300 +69.400 0 GID a: The remaining book value of the existing roaster is oond to the nearest b. The after tax proceeds of the sale of the existing master will be & c. The change in networking capital wit be 5 Round to the nearest dollar) d. The initial investment associated with the proposed new roaster will be found to the dar) Round to the nearest dofar CAME TO HIM wwwvwwviny... b. Calculate the after-tax proceeds of the sale of the existing roaster. c. Calculate the change in net working capital using the following figures: Anticipated Changes in Current Assets and Current Liabilities Accruals Inventory Accounts payable Accounts receivable -$21,000 + 50,100 + 40,300 +69,400 Cash Notes payable d. Calculate the initial investment associated with the proposed new roaster. 0 + 14,900 a. The remaining book value of the existing roaster is S (Round to the nearest dollar) b. The after-tax proceeds of the sale of the existing roaster will be S c. The change in net working capital will be S d. The initial investment associated with the proposed new roaster will be S (Round to the nearest dollar) (Round to the nearest dollar) (Round to the nearest oaster sale d pital u Asset ng roa me exis bes the pro Rounded Depreciation Percentages by Recovery Year Using MACRS for First Four Property Classes Recovery year 1 2 3 4 5 6 7 8 9 10 11 Totals 3 years 33% 45% 15% 7% Percentage by recovery year" 5 years 20% 32% 19% 12% 12% 5% 7 years 14% 25% 18% 12% 9% 9% 9% 4% 10 years 10% 18% 14% 12% 95 8% 7% 6% 6% 6% 45 100% 100% 100% 100% These percentages have been rounded to the nearest whole percent to simplify calculations while retaining realism To calculate the actual depreciation for tax purposes, be sure to apply the actual unrounded percentages or directly apply double-declining balance (200%) depreciation using the half-year

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