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Problem 12-31 (Algo) Replocement decision analysis [LO12-4] Hercules Exercise Equipment Company purchased a computerized measuring device two years ago for $72,000. The equipment falls into the five-year category for MACRS depreciation and can currently be sold for $31,800. A new piece of equipment will cost $200.000 it also falls into the five-year category for MACRS depreciation. Assume the new equipment would provide the following stream of added cost savings for the next six years. Use fable 12-12. Use Appendix 8 for an approximate answer but calculate your final answer using the formula and financial calculator methods. The firm's tax rate is 25 percent and the cost of capital is 12 percent. a. What is the book value of the old equipment? Note: Do not round intermediete calculations and round your answer to the nearest whole dollar. b. What is the tax loss on the sale of the old equipment? Note: Do not round intermediote colculations and round your answer to the nearest whole dollar. c. What is the tax benefit from the sale? Note: Do not round intermediote calculations and round your answer to the nearest whole dollar. d. What is the cash inflow from the sale of the old equipment? Note: Do not round intermediote calculations and round your answer to the nearest whole dollor., e. What is the net cost of the new equipment? (Include the inflow from the sale of the old equipment.) Note: Do not round intermediote calculations and round your answer to the neorest whole dollar. e. What is the net cost of the new equipment? (Include the inflow from the sale of the old equipment.) Note: Do not round intermediate calculations and round your onswer to the nearest whole dollar. f. Determine the depreciation schedule for the new equipment. Note: Round the depreciation base and annual depreciation answers to the nearest whole dollar. Round the percento depreciation factors to 3 decimal places. 9. Determine the depreciation schedule for the remaining years of the old equipment Note: Round the depreciotion bose and onnual depreciation onswers to the nearest whole dollor. Round the percentoge depreciation factors to 3 decimal places. h. Determine the incremental depreciation between the old and new equipment and the related tax shield benefits. Note: Enter the tox rate as o decimal rounded to 2 decimol places. Round all other onswers to the nearest whole dollar

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