Question: Please fill out all the boxes for H. Hercules Exercise Equipment Co. purchased a computerized measuring device two years ago for $76,000. The equipment falls
Please fill out all the boxes for H.


Hercules Exercise Equipment Co. purchased a computerized measuring device two years ago for $76,000. The equipment falls into the ve-year category for MACRS depreciation and can currently be sold for $33,800. A new piece of equipment will cost $150,000. It also falls into the five-year category for MACRS depreciation Assume the new equipment would provide the following stream of added cost savings for the next six years. Use Table 1212. Use Appendix B for an approximate answer but calculate your nal answer using the formula and financial calculator methods. Cash Savings $60.000 50.000 48.000 46.000 43,000 32,000 r___________ Year mmIP-DJNll The firm's tax rate is 25 percent and the cost of capital is 14 percent. h. Determine the incremental depreciation between the old and new equipment and the related tax shield benefits. (Enter the tax rate as a decimal rounded to 2 decimal places. Round all other answers to the nearest whole dollar.) Depreciation Depreciation Year on New on Old Incremental Tax Rate Tax Shield Equipment Equipment Depreciation Benefits - 2 3 4 6
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