Question: 8 years ago, a new machine cost $7,000,000 to purchase and an additional $570,000 for the installation. The machine was to be linearly depreciated to

8 years ago, a new machine cost $7,000,000 to purchase and an additional $570,000 for the installation. The machine was to be linearly depreciated to zero over 25 years.

The company has just sold the machine for $4,200,000, and its marginal tax rate is 25%.

Part 1

What is the annual depreciation?

Part 2

What is the current book value?

Part 3

What is the cash inflow from the sale of the old equipment?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

8 years ago, a new machine cost $7 million to purchase and an additional $460,000 for the installation. The machine was to be linearly depreciated to zero over 20 years. The company has just sold the...

8 years ago, a new machine cost $7 million to purchase and an additional $580,000 for the installation. The machine was to be linearly depreciated to zero over 10 years. The company has just sold the...

8 years ago, a new machine cost $ 7 million to purchase. The machine was to be linearly depreciated to zero over 1 0 years. What is the annual depreciation ( in $ ) ? What is the current book value (...

TIUNIG Intro 8 years ago, a new machine cost $7 million to purchase. The machine was to be linearly depreciated to zero over 10 years. Attempt 1/5 for 10 pts. Part 1 What is the annual depreciation...

Intro 8 years ago, a new machine cost $7 million to purchase. The machine was to be linearly depreciated to zero over 10 years. A. Attempt 1/5 for 10 pts. What is the annual depreciation (in \$)?...

Need help with part 3. So far I got 2,359,500 & 4,244,250 and they're both wrong. Thank you! Intro 8 years ago, a new machine cost $5,000,000 to purchase and an additional $490,000 for the...

8 years ago, a new machine cost $7,000,000 to purchase and an additional $540,000 for the installation. The machine was to be linearly depreciated to zero over 10 years. The company has just sold the...

Problem 5 Intro 8 years ago, a new machine cost $7,000,000 to purchase and an additional $540,000 for the installation. The machine was to be linearly depreciated to zero over 30 years. The company...

The declaration of a cash dividend by the directors results in: Multiple Choice a decrease in cash and a decrease in retained earnings. a decrease in retained earnings and an increase in current...

Determine the force in each member of the Gambrel roof truss shown. State whether each member is in tension or compression. e kaps 2kps 2 kips 3.6 ft I kip I kip B. -121--12n--12 ft--12 ft-

Forest, Incorporated, has an issue of preferred stock outstanding that pays a $ 3 . 1 5 dividend every year in perpetuity. If this issue currently sells for $ 9 2 per share, what is the required...

Add "Viggo Mortenslet cast = new Map ( ) ;en " to the cast as the key, with value "Aragorn".