$120$

$121$ Question $9$a

$122$

$123,$$$56,800$

$124$ Question $9$b

$125$

$126,$$$23,200$

$127$ Question $9$c

$128$

$129,$$$1,800$

$130$ Question $9$d

$131$

$132$

$133$

$134$

$135,$$$24,622$

$136$ Question $97$

$137$

$138$

$139$

$140$

$141,$$$103,378$

$1428$ points

$143$

$144$

$145$

$146$

$147$

$148$

A small manufacturer is considering an equipment replacement project. The new equipment would have an installed cost of $$125,000$ and would replace existing equipment that was purchased $3$ years ago at an installed cost of $$80,000.$ If the company moves forward with the replacement, it could sell the old equipment for $$25,000.$ Purchasing the new equipment would result in the company's current assets increasing by $$12,000$ and current liabilities increasing by $$9,000.$ The company uses the $5-$year MACRS table for depreciation $($use the rates from our text and homework problems$)$ and is taxed at $21\%.$ Students must do their own work, with no help$/$solutions provided by others.

a$)$ What is the accumulated depreciation of the old equipment?

b$)$ What is the current book value of the old equipment?

c$)$ What is the amount of depreciation recapture$/$recovery$?$

d$)$ What is the tax on the sale of the old equipment?

e$)$ What are the after$-$tax proceeds from the sole of the old equipment?

f$)$ What is the change in Net Working Capital?

g$)$ What is the initial investment for the project?