The Everly Equipment Company's flange - lipping machine was purchased 5 years ago for $ 5 5
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Question:
The Everly Equipment Company's flangelipping machine was purchased years ago for $ It had an expected life of years when it was bought and its remaining depreciation is $ per year for each year of its remaining life. As older flangelippers are robust and useful machines, this one can be sold for $ at the end of its useful life.
A new highefficiency digitalcontrolled flangelipper can be purchased for $ including installation costs. During its year life, it will reduce cash operating expenses by $ per year, although it will not affect sales. At the end of its useful life, the highefficiency machine is estimated to be worthless. MACRS depreciation will be used, and the machine will be depreciated over its year class life rather than its year economic life, so the applicable depreciation rates are and
The old machine can be sold today for $ The firm's tax rate is and the appropriate cost of capital is
If the new flangelipper is purchased, what is the amount of the initial cash flow at Year Round your answer to the nearest dollar. Cash outflow, if any, should be indicated by a minus sign.
$
What are the incremental net cash flows that will occur at the end of Years through Do not round intermediate calculations. Round your answers to the nearest dollar. Cash outflows, if any, should be indicated by a minus sign.
CF $
CF $
CF $
CF $
CF $
What is the NPV of this project? Do not round intermediate calculations. Round your answer to the nearest whole dollar. Negative value, if any, should be indicated by a minus sign.
$
Should Everly replace the flangelipper?
Yes
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