! !

Home Study tools " My courses " My books Career Life "

Find solutions for your homework Search

home / study / business / !nance / !nance questions and answers / c lombard company is contemplating the purchase of a new high-speed widg…

Question: C Lombard Company is contemplating the purchase of a new … Post a question

Answers from our experts for your tough
homework questions

Enter question

Continue to post
20 questions remaining

Snap a photo from your

phone to post a question
We'll send you a one-time download
link

888-888-8888 Text me

By providing your phone number, you agree to receive a one-time

automated text message with a link to get the app. Standard
messaging rates may apply.

My Textbook Solutions

Introduction A First Numerical

to Chemical... Course in... Analysis
7th Edition 5th Edition 10th Edition

View all solutions

can you solve these using the info above

Show transcribed image text

Expert Answer

Jitendra Prasad Shaw answered this

11,357 answers
Was this answer helpful? 1 0

b Depreciation Shedule

WITH PROPOSED MACHINE:

Cost of Machine $105,000

Installation $5,000

Total Costs $110,000

A B=A*110000

Accumulated
Year MACRS Rate Depreciation Depreciation

1 20% $22,000 $22,000

2 32% $35,200 $57,200

3 19% $20,900 $78,100

4 12% $13,200 $91,300

5 12% $13,200 $104,500

WITH EXISTING MACHINE:

Total Costs $60,000

A B=A*60000

Year MACRS Rate Depreciation

1 19% $11,400

2 12% $7,200

3 12% $7,200

4 5% $3,000

5 0% $0

WITH PROPOSED MACHINE

Year 1 2 3 4

Earning Before depn,interest and taxes $43,000 $43,000 $43,000 $43,000

Depreciation $22,000 $35,200 $20,900 $13,200

Earning Before interest and taxes $21,000 $7,800 $22,100 $29,800

Taxes(40%) $8,400 $3,120 $8,840 $11,920

Net Operating Pro!t after taxes $12,600 $4,680 $13,260 $17,880

Add back Depreciation $22,000 $35,200 $20,900 $13,200

Operating Cash Flow $34,600 $39,880 $34,160 $31,080

WITH EXISTING MACHINE

Year 1 2 3 4

Earning Before depn,interest and taxes $26,000 $24,000 $22,000 $20,000

Depreciation $11,400 $7,200 $7,200 $3,000

Earning Before interest and taxes $14,600 $16,800 $14,800 $17,000

Taxes(40%) $5,840 $6,720 $5,920 $6,800

 Net Operating Pro!t after taxes $8,760 $10,080 $8,880 $10,200

Add back Depreciation $11,400 $7,200 $7,200 $3,000

Operating Cash Flow $20,160 $17,280 $16,080 $13,200

INCREMENTAL RELEVANT OPERATING CASH FLOW

Year 1 2 3 4

Proposed Machine $34,600 $39,880 $34,160 $31,080

Existing Machine $20,160 $17,280 $16,080 $13,200

Incremental Cash #ow $14,440 $22,600 $18,080 $17,880

"

Comment

Questions viewed by other students

Q: Lombard Company is contemplating the purchase of a new​ high-speed widget grinder to replace the existing
grinder. The existing grinder was purchased 2 years ago at an installed cost of $55,300​; it was being depreciated​
straight-line for 5 years. The existing grinder is expected to have a usable life of 5 more years. The new grinder costs
$105,800 and requires $4,500 in...

A: See answer

Q: 5 Integrative: Determining relevant cash #ows Lombard Company is contemplating the purchase of a new high-speed
widget grinder to replace the existing grinder. The existing grinder was purchased 2 years ago at an installed cost of
S60,000, it was being depreciated under MACRS using a 5-year recovery period. The existing grinder is expected to
have a usable life of 5 more years. The...

A: See answer

Show more "

COMPANY LEGAL & POLICIES CHEGG PRODUCTS AND SERVICES CHEGG NETWORK CUSTOMER SERVICE

About Chegg Advertising Choices Cheap Textbooks Mobile Apps EasyBib Customer Service
Chegg For Good Cookie Notice Chegg Coupon Sell Textbooks Internships.com Give Us Feedback
College Marketing General Policies Chegg Play Solutions Manual Thinkful Help with eTextbooks
Corporate Development Intellectual Property Rights Chegg Study Help Study 101 Help to use EasyBib Plus
Investor Relations Terms of Use College Textbooks Textbook Rental Manage Chegg Study
Jobs Global Privacy Policy eTextbooks Used Textbooks Subscription

Join Our Affiliate Program DO NOT SELL MY INFO Flashcards Digital Access Codes Return Your Books

Media Center Honor Code Learn Chegg Money Textbook Return Policy

Site Map Honor Shield Chegg Math Solver

© 2003-2021 Chegg Inc. All rights reserved.