Question: help plz Shein Tel Inc. is considering replacing an old machine by a new one. The existing machine was purchased five years ago for $105,000

help plz  help plz Shein Tel Inc. is considering replacing an old machine
by a new one. The existing machine was purchased five years ago

Shein Tel Inc. is considering replacing an old machine by a new one. The existing machine was purchased five years ago for $105,000 and has a current market value of $30,000. It will be useless in four years. The purchase price for the new machine will be $190,000. In addition, the vendor of the new machine will charge $10,000 for shipping and installation. The resale value of the new machine in four years will be $60,000. Shein Tel estimates that the new machine will reduce maintenance cost by $60,000 per year and save labor costs by $15,000 per year for four years. The new machine will be housed in a space that would have otherwise been rented out for $5,000 per year. Additional inventories of $5,000 will be required when the new machine is in use. At the end of the new machine's life this working capital will be recovered. Both machines belong to a class with a CCA rate of 30 percent. The tax rate is 35% and the cost of capital is estimated to be 20%. What is the incremental cash flow for period 0? Answer rounding to the nearest integer (ZERO decimals), do not include any symbols, like dollar signs ($) percentage signs (%) or thousand separators (.). If solution is a negative number include a (-) sign before the number whitout any space. For example: -1152 N What is the incremental UCC at the end of period 4? Answer rounding to the nearest integer (ZERO decimals), do not include any symbols, like dollar signs ($) percentage signs (%) or thousand separators (). If solution is a negative number include a (-) sing before the number whiteout any space. For example: -1152 What is the discounted incremental cash flow in period 3? Answer rounding to the nearest integer (ZERO decimals), do not include any symbols, like dollar signs ($) percentage signs (%) or thousand separators (). If solution is a negative number include a - sing before the number whiteout any space. For example: -1152 A/ What is the value of the terminal cash flows in year 4 (no including OCF)? Answer rounding to the nearest integer (ZERO decimals), do not include any symbols, like dollar signs ($) percentage signs (%) or thousand separators (). If solution is a negative number include a (-) sing before the number whiteout any space. For example: -1152 A Should Shein Tel accept the replacement of the machine? (yes or no) A Shein Tel Inc. is considering replacing an old machine by a new one. The existing machine was purchased five years ago for $105,000 and has a current market value of $30,000. It will be useless in four years. The purchase price for the new machine will be $190,000. In addition, the vendor of the new machine will charge $10,000 for shipping and installation. The resale value of the new machine in four years will be $60,000. Shein Tel estimates that the new machine will reduce maintenance cost by $60,000 per year and save labor costs by $15,000 per year for four years. The new machine will be housed in a space that would have otherwise been rented out for $5,000 per year. Additional inventories of $5,000 will be required when the new machine is in use. At the end of the new machine's life this working capital will be recovered. Both machines belong to a class with a CCA rate of 30 percent. The tax rate is 35% and the cost of capital is estimated to be 20%. What is the incremental cash flow for period 0? Answer rounding to the nearest integer (ZERO decimals), do not include any symbols, like dollar signs ($) percentage signs (%) or thousand separators (.). If solution is a negative number include a (-) sign before the number whitout any space. For example: -1152 N What is the incremental UCC at the end of period 4? Answer rounding to the nearest integer (ZERO decimals), do not include any symbols, like dollar signs ($) percentage signs (%) or thousand separators (). If solution is a negative number include a (-) sing before the number whiteout any space. For example: -1152 What is the discounted incremental cash flow in period 3? Answer rounding to the nearest integer (ZERO decimals), do not include any symbols, like dollar signs ($) percentage signs (%) or thousand separators (). If solution is a negative number include a - sing before the number whiteout any space. For example: -1152 A/ What is the value of the terminal cash flows in year 4 (no including OCF)? Answer rounding to the nearest integer (ZERO decimals), do not include any symbols, like dollar signs ($) percentage signs (%) or thousand separators (). If solution is a negative number include a (-) sing before the number whiteout any space. For example: -1152 A Should Shein Tel accept the replacement of the machine? (yes or no) A

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!