What is the book value of old machine today

Assignment Help Financial Management

Reference no: EM131914469

Bulldog Inc. purchased a leather-cutting machine seven years ago. The cost of the machine was $11,200. It was epected to be used for 10 years. The machine has been depreciated on a straight-line basis with an estimated salvage value of $1,200. The machine can be sold for $3,500 today.

Bulldog is considering the purchase of a new leather-cutting machine to replace exisiting machine. Having the new machine will result in an increase of revenue $13,000, but the operating costs will also increase by $6,000 for 3 years. The new machine cost $14,000, with an expected salvage of $2,000 at the end of the third year. The new machine will be depreciated using MACRS method, and is considered a 3-year property. There will be an increase of $1,600 in net working capital. Gorilla's tax rate is 40% and cost of capital is 16%.

What is the book value of the old machine today?

Reference no: EM131914469

Questions Cloud

Compute the mirr statistic for project : Compute the MIRR statistic for Project J if the appropriate cost of capital is 9 percent.

Prepare a consolidated balance sheet working paper : Prepare consolidated balance sheet working paper, assuming Webnet Solutions is acquiring company and issues $200 million in stock for all of stock of Microtech.

Compute taxable income and income taxes payable : Prior to 2012, taxable income and pretax financial income were identical. Compute taxable income and income taxes payable for 2013

What is chongleul : What is Chongleul, the author's thesis (claim), her "I Say"? Is the thesis indeed a "new interpretation" as the title claims?

What is the book value of old machine today : Bulldog Inc. purchased a leather-cutting machine seven years ago. What is the book value of the old machine today?

Need program that outputs the lyrics for ninety-nine bottles : Design your program with a class named BeerSong whose constructor takes an integer parameter that is the number of bottles of beer initially on the wall

What is the average cost assigned to each unit included : Mickley Company's predetermined overhead rate is $20.00. If Job A-500 consists of 80 units, what is the average cost assigned to each unit included in the

Should the legal system restrain mcdonald use of toys : In 2010, the Center for Science in the Public Interest and a concerned parent sued McDonald's for deceptive advertising by using toys in Happy Meals.

What focal length do you think was used in the scene : What focal length do you think was used in the scene? What type of depth of field: shallow or great?

User Account

All Pages