the installed cost of a proposed comouter controlled automatic feeder roaster will be 136000. the firm has a chance to seel its 4-year old roaster for 34900. the existing roaster ofigianlly cost 60500 and was depreciated using MACRS and a 7 year recover period. Dupree is sibject to a 40% tax rate.

Calculating initial investment DuPree Coffee Roasters, Inc. wishes to expand and modernize its facilities. The in using MACRS and a 7-year recovery period (see the table Dupree is subject to a 40% tax rate a. What is the book value of the existing roaster? b. Calculate the after-tax proceeds of the sale of the existing roaster C. Calculate the change in net working capital using the following figures Anticipated Changes in Current Assets and Current Liabilities Accruals - $19,900 Inventory + 50,000 Accounts payable +40,400 Accounts receivable + 69,700 Cash 0 a. The remaining book value of the existing roaster is $ (Round to the nearest dollar) b. The after-tax proceeds of the sale of the existing roaster will be $ (Round to the nearest dollar) c. The change in net working capital will be $ (Round to the nearest dollar) d. The initial investment associated with the proposed new roaster will be $ (Round to the nearest dollar) 3 4 (Click on the icon here in order to copy the contents of the data table below into a spreadsheet) Rounded Depreciation Percentages by Recovery Year Using MACRS for First Four Property Classes Percentage by recovery year Recovery year 3 years 5 years 7 years 10 years 1 33% 20% 14% 10% 2 45% 32% 25% 18% 15% 19% 18% 14% 7% 12% 12% 12% 5 12% 9% 9% 5% 9% 8% 7 9% 7% 8 4% 6% 9 6% 10 6% 4% Totals 100% 100% 10096 100% These percentages have been rounded to the nearest whole percent to simplify calculations while retaining realism To calculate the actual depreciation for tax purposes be sure to apply the actual unrounded percentages or directly apply double-declining balance (200%) depreciation using the half year convention 6 11 Print Done