Calculate the book value of the old kitchen

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A restaurant is planning on replacing its existing kitchen, which was purchased 3 years ago at a cost of $15.000. It could be sold today at $8.000. The depreciation period of this system is 5 years from the date of its purchase. A new kitchen could be bought for $16.000 and would have an installation cost of $2.000. Asume a 25% tax rate over profits.

Problem 1: Calculate the book value of the old kitchen.

Problem 2: The after-tax proceeds of its sale for $8.000

Problem 3: Calculate the initial investment associated with the replacement project.

Reference no: EM132819055

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