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Project p. 460 11-7 You have been asked by the president of your company to admiration the proposed acquisition of a new spectrometer for the heartys R&D department. The equipments basic correct is $70,000, and it would damage another $15,000 to modify it for special use by your firm. The spectrometer, which falls into the MACRS 3- family class, would be sold after 3 historical period for $30,000. Use of the equipment would require an increase in can on the job(p) capital (spare parts inventory) of $4,000. The spectrometer would have no onus on revenues, but it is expected to save the firms marginal federal-plus-state tax rate is 40%. a. What is the exculpate cost of the spectrometer? Cost of investment at year 0 Baisc wrong$(70,000) Modification$(15,000) Increase in NOWC$(4,000) exchange Outlay For tender Equipment$(89,000) b. What are the net operating silver hang ups in age 1, 2, and 3? category 1 form 2 Year 3 1.After-tax nest egg $15,000 $15,000 $15,000 2.Depreciation$28,050$38,250$12,750 3.Depreciation tax savings $11,220 $15,300 $5,100 utmost cash flow $26,220 $30,300 $20,100 c. What is the additional (nonoperating) cash flow in Year 3?

|  | | | Year 3| seed restrain think of| | | $18,700| Depreciation| | | $12,750| Ending book take to be| | | $5,950|  |  |  |  |  |  |  |  |  |  | commercialize value when scavenged at Year 3| $30,000.00| watchword value when salvaged at Year 3| | $5,950.00| Expected attract or! loss| | | $24,050.00| impose expense (credit)| | | $9,620.00| | | | | | Cash from barter| | | $30,000.00| Tax expense (credit)| | | $9,620.00| Net cash flow from salvage| | $20,380.00| Returned NOWC|  |  | $4,000.00| |  |  |  | $24,380.00|  |  |  |  |  | d....If you require to get a full essay, order it on our website: BestEssayCheap.com

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