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What is the book value of the existing roaster

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Reference no: EM132998002

Question - Gloria Jean's Coffee Roasters, Inc., wishes to expand and modernize its facilities. The installed cost of a proposed computer-controlled automatic-feed roaster will be $130,000. 15 The firm has a chance to sell its 4-year-oldroaster for $35,000. The existing roaster originally cost $60,000 and was being depreciated using 10% Diminishing Balance Method and a 7- year recovery period. Gloria is subject to a 40% tax rate.

a. What is the book value of the existing roaster?

b. Calculate the after-tax proceeds of the sale of the existing roaster.

c. Calculate the change in net working capital using the following figures.

d. Calculate the initial investment associated with the proposed.

Reference no: EM132998002

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