Calculate the effect from the sale of the exising asset

Assignment Help Financial Management

Reference no: EM131012855

Fine Press is considering replacing the existing press with a more efficient press. The new press costs $55,000 and requires $5000 in installation costs. The old press was purchased 2 years ago for an installed cost of $35,000 and can be sold for $20,000 net of any removal costs today. Both presses are depreciated under MACRS 5 year recovery schedule. The firm is in 40 percent marginal tax rate.

A. Calculate the book value of the existing press being replaced.

B. Calculate the effect from the sale of the exising asset.

C. Calculate the initial investment of the new asset.

Reference no: EM131012855

Questions Cloud

Compare and contrast the similarities : Compare and contrast the similarities and differences between ionic and covalent bonding

Risk-free rate-required rate of return : Required Rate of Return Assume that the risk-free rate is 5% and that the market risk premium is 3%. What is the required rate of return on a stock with a beta of 0.9? Round your answer to two decimal places. % What is the required rate of return on ..

Stock valuation methods zero-growth-constant growth : The stock valuation methods zero-growth, constant growth, variable growth, free cash flow, P/E multiple models, and book value method, to find out which is most accurate in regard to value to firms we would have to analyze each one individually.

Which disease can affect the human nervous system : Which of the following events would result in decreased blood glucose levels?

Calculate the effect from the sale of the exising asset : Fine Press is considering replacing the existing press with a more efficient press. The new press costs $55,000 and requires $5000 in installation costs. The old press was purchased 2 years ago for an installed cost of $35,000 and can be sold for $20..

Price-earnings ratio remains at its current level : Fontaine Inc. recently reported net income of $7 million. It has 770,000 shares of common stock, which currently trades at $25 a share. Fontaine continues to expand and anticipates that 1 year from now, its net income will be $10.15 million. Assuming..

Does the corporation have the right of freedom of religion : Answer this question which related to Citizens United v. FEC case " Does the corporation have the right of Freedom of Religion?" And then Discuss the different tests of establishment and which one we think the court should embrace or discuss the ..

Cash budget-basic : Grenoble Enterprises had sales of $50,500 in March and $60,000 in April. Forecast sales for May, June, and July are $69,600, $79,800, and $99,800, respectively. The firm receives other income of $2,100 per month. The firm’s actual or expected purchas..

Sample of nitrogen gas occupies a volume : 1. A balloon holds 29.1 kg of helium. What is the volume of the balloon if the pressure is 1.23 atm and the temperature is 22 °C?2. A 1.71 mol sample of nitrogen gas occupies a volume of ______ L at STP.

User Account

All Pages