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Calculate the initial investment for the replacement

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Question - Use the following information to answer the questions that follow: UC Manufacturing Company (UCC) is considering replacing one machine with another. The old machine was purchased 3 years ago for an installed cost of Php10,000. The firm is depreciating the machine using the straight line method of depreciation with Swear useful life and n salvage value. The new machine costs Php24,000 and requires Php2,000 in installation costs. The firm is subject to a 40% tax rate (including capital gains).

Required -

1. Calculate the initial investment for the replacement if UCC sells the old machine for Php11,000.

2. Calculate the initial investment for the replacement if UCC sells the old machine for Php7,000.

3. Calculate the initial investment for the replacement if UCC sells the old machine for Php4,000.

4. Calculate the initial investment for the replacement if UCC sells the old machine for Php1,500.

Reference no: EM133057033

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