Question: Problem 12-31 (Algo) Replacement decision analysis [LO12-4] Hercules Exercise Equipment Company putchased a computerzed measuring device two years ago for $72,000, The equipment falls into

 Problem 12-31 (Algo) Replacement decision analysis [LO12-4] Hercules Exercise Equipment Company
putchased a computerzed measuring device two years ago for $72,000, The equipment
falls into the five-year category for MACRS depreciation and can currently be
sold for $31,800. A new piece of equipment will cost $200,000. It

Problem 12-31 (Algo) Replacement decision analysis [LO12-4] Hercules Exercise Equipment Company putchased a computerzed measuring device two years ago for $72,000, The equipment falls into the five-year category for MACRS depreciation and can currently be sold for $31,800. A new piece of equipment will cost $200,000. It also falis into the five-year category for MACRS depreciation. Assume the new equipment would provide the foliowing stream of added cost savings for the next six years. Use fable 12-12 Use Appendix. B for an approximate answer but calculate your finet answer using the formula and financlal calculator methods. The firm's tax rate is 25 percent and the cost of copval is 12 percent: a. What is the book value of the old equipment? Note; Do not round intermediate calculations and round your answer to the nearest whole dollar. b. What is the tax loss on the sale of the old equipment? Note: Do not round intermediate calculations and round your answer to the nearest whole dollar. c. What is the tax benefit from the sole? Note: Do not round intermediate calculations and round your answer to the nearest whole dollar. d. What is the cash inflow from the sale of the oid equipment? Note: Do not round intermediate calculations and round your answer to the nearest whole dollar; e. What is the net cost of the new equipment? (Include the inflow from the sale of the old equipment) Note: Do not round intermediate calculations and round your answer to the nearest whole dollar. Table 12-12 Depreciation percentages (expressed in decimals)

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