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What is the amount of investment in the new equipment

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Reference no: EM132639470

Bravado Company is considering to replace its old equipment with a new one. The old equipment had a net book value of 100,000 and 4 remaining useful years with 25,000 depreciation each year. The old equipment can be sold at 80,000. The new equipment costs 160,000, have a 4-year life. Cash savings on operating expenses before 40% taxes amount to 50,000 per year.

Problem 1: What is the amount of investment in the new equipment?

Reference no: EM132639470

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