Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. replacement analysis st. johns river shipyards' we

Replacement Analysis St. Johns River Shipyards' welding machine is 15 years old, fully depreciated, and...

70.2K

Verified Solution

Question

Finance

Replacement Analysis

St. Johns River Shipyards' welding machine is 15 years old, fully depreciated, and has no salvage value. However, even though it is old, it is still functional as originally designed and can be used for quite a while longer. A new welder will cost $182,500 and have an estimated life of 8 years with no salvage value. The new welder will be much more efficient, however, and this enhanced efficiency will increase earnings before depreciation from $28,000 to $66,500 per year. The new machine will be depreciated over its 5-year MACRS recovery period, so the applicable depreciation rates are 20.00%, 32.00%, 19.20%, 11.52%, 11.52%, and 5.76%. The applicable corporate tax rate is 25%, and the project cost of capital is 10%. What is the NPV if the firm replaces the old welder with the new one? Do not round intermediate calculations. Round your answer to the nearest dollar. Negative value, if any, should be indicated by a minus sign.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Biology
1.2K views

In a paragraph response, choose a myth from this unit and explain why it exemplfies...

Psychology
1.2K views

First, please consider this \"list of failures and successes\" in the life of Abraham Lincoln. We're suggesting...

General Management
1.2K views

Your organization has decided to implement the EHR system, and you have been appointed as a...

Advance Math
1.2K views

Prove that there is only one possible multiplication table for G if G has exactly 1,...

Biology
1.2K views

are incoming short distance signals on dendrites or the cell body vs outgoing long distance...

Physics
1.2K views

An ideal gas undergoes a cyclic process as shown in the given P T diagram...

Geometry
1.2K views

Geometry GMD 3 Name 20 23 Kuta Software LLC All rights reserved Volume of Cones...

Accounting
1.2K views

part B (Mark Heun) Mark Heun,...

Accounting
1.2K views

Sweet Corporation traded a used truck (cost $20,000, accumulated depreciation $18,000) for a small computer...

Accounting
1.2K views

Describe how the cost of good sold is calculated, why the ending inventory is important...

Accounting
1.2K views

The management of Ballard MicroBrew is considering the purchase of an automated bottling machine for...

Finance
1.2K views

For example, assume Sophia wants to earn a return of 9.00% and is offered the...