parts, a,b,c

P11-16 (similar to) Question Help Relevant cash flows-No terminal value Central Laundry and Cleaners is considering replacing an existing piece of machinery with a more sophisticated machine. The old machine was purchased 3 years ago at a cost of $49,500, and this amount was being depreciated under MACRS using a 5-year recovery period. The machine has 5 years of usable life remaining. The new machine that is being considered costs $76,700 and requires $4,400 in installation costs. The new machine would be depreciated under MACRS using a 5-year recovery period. The firm can currently sell the old machine for $54,400 without incurring any removal or cleanup costs. The firm is subject to a tax rate of 40%. The revenues and expenses (excluding depreciation and interest) associated with the new and the old machines for the next 5 years are given in the table (Table contains the applicable MACRS depreciation percentages.) Note: The new machine will have no terminal value at the end of 5 years. a. Calculate the initial investment associated with replacement of the old machine by the new one. b. Determine the incremental operating cash inflows associated with the proposed replacement. (Note: Be sure to consider the depreciation in year 6.) c. Depict on a time line the relevant cash flows found in parts (a) and (b) associated with the proposed replacement decision. Calculate the initial investment below: (Round to the nearest dollar.) Cost of new asset Installation costs Total cost of new asset Proceeds from sale of old asset Tax on sale of old asset Total proceeds, sale of old asset Initial investment 49,JUU, U LI 3 TUULIL WAS Ueny MY COMISIUel cu LUSS JIU,allu leyulles 14,400 III i Data Table ng any removal or cleanup costs. The firm is subject to a installation costs. The new machine w tax rate of 40%. The revenues and exp given in the table ! (Table : con a. Calculate the initial investment assol b. Determine the incremental operating c. Depict on a time line the relevant ca (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Calculate the initial investment below: Cost of new asset ant New machine Expenses (excluding depreciation and interest) $720,200 720,200 720,200 720,200 720,200 Revenue $749,600 749,600 749,600 749,600 749,600 Installation costs Old machine Expenses (excluding depreciation and interest) $660,600 660,600 660,600 660,600 660,600 Revenue $673,100 675,100 679,100 677,100 673,100 Total cost of new asset Proceeds from sale of old asset Tax on sale of old asset Print Done Total proceeds, sale of old asset considered costs $76,700 and requires $4,400 in any removal or cleanup costs. The firm is subject to a (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) $49,500, and this amount was being depreciated installation costs. The new machine would be de tax rate of 40%. The revenues and expenses (ex given in the table ! (Table : contains the a a. Calculate the initial investment associated with b. Determine the incremental operating cash infid c. Depict on a time line the relevant cash flows fd Rounded Depreciation Percentages by Recovery Year Using MACRS for First Four Property Classes Percentage by recovery year Recovery year 3 years 5 years 7 years 33% 20% 14% 45% 32% 25% 15% 19% Calculate the initial investment below: (Round to 10 years 10% 18% 14% Cost of new asset Installation costs Total cost of new asset Proceeds from sale of old asset Tax on sale of old asset Total proceeds, sale of old asset NO 000 6% 11 6% 4% Totals 100% 100% 100% 100% *These percentages have been rounded to the nearest whole percent to simplify calculations while Initial investment Enter any number in the edit fields and then cli