Book value of the existing old asset. Introduction: The capital budgeting is the process of making huge investments by the firms to make their capital assets grow faster such as the building of new buildings, purchase of advanced costly machineries etc. Book value is the strictly recorder value of an asset in the auditing book of the firm.

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Answer 1

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Definition Definition Tax imposed by the government on the "gain" or increase in the value of an asset at the time of its sale by the owner. Capital gain is computed based on the purchase price and sale price of the asset. If the sale price of the asset is more than the purchase price, there is a gain on the sale of asset. A tax is imposed on such gain in accordance with the applicable tax rates at the time of sale.

Chapter 11, Problem 11.14P

a)

Summary Introduction

To determine:

Book value of the existing old asset.

Introduction:

The capital budgeting is the process of making huge investments by the firms to make their capital assets grow faster such as the building of new buildings, purchase of advanced costly machineries etc.

Book value is the strictly recorder value of an asset in the auditing book of the firm.

b)

Summary Introduction

To determine:

After tax proceeds of the sale of the old coffee machine.

c)

Summary Introduction

To determine:

Determining the change in current assets, liabilities and Net working Capital of the firm by the new option.

d)

Summary Introduction

To determine:

Initial investment for the new machine.

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Calculating initial investment DuPree Coffee Roasters, Inc., wishes to expand and modernize its facilities. The installed cost of a proposed computer-controlled automatic-feed roaster will be $131,000. The firm has a chance to sell its 4-year-old roaster for $35,900. The existing roaster originally cost $59,000 and was being depreciated using MACRS and a 7-year recovery period (see the table E 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 - $19,600 +51,000 Accruals Inventory Accounts payable + 39,800 Accounts receivable + 69,500 a. The remaining book value of the existing roaster is $ (Round to the nearest dollar.)

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Answer 2

Question

Definition Definition Tax imposed by the government on the "gain" or increase in the value of an asset at the time of its sale by the owner. Capital gain is computed based on the purchase price and sale price of the asset. If the sale price of the asset is more than the purchase price, there is a gain on the sale of asset. A tax is imposed on such gain in accordance with the applicable tax rates at the time of sale.

Chapter 11, Problem 11.14P

a)

Summary Introduction

To determine:

Book value of the existing old asset.

Introduction:

The capital budgeting is the process of making huge investments by the firms to make their capital assets grow faster such as the building of new buildings, purchase of advanced costly machineries etc.

Book value is the strictly recorder value of an asset in the auditing book of the firm.

b)

Summary Introduction

To determine:

After tax proceeds of the sale of the old coffee machine.

c)

Summary Introduction

To determine:

Determining the change in current assets, liabilities and Net working Capital of the firm by the new option.

d)

Summary Introduction

To determine:

Initial investment for the new machine.

Expert Solution & Answer

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See solution

Answer 3

Question

Definition Definition Tax imposed by the government on the "gain" or increase in the value of an asset at the time of its sale by the owner. Capital gain is computed based on the purchase price and sale price of the asset. If the sale price of the asset is more than the purchase price, there is a gain on the sale of asset. A tax is imposed on such gain in accordance with the applicable tax rates at the time of sale.

Chapter 11, Problem 11.14P

a)

Summary Introduction

To determine:

Book value of the existing old asset.

Introduction:

The capital budgeting is the process of making huge investments by the firms to make their capital assets grow faster such as the building of new buildings, purchase of advanced costly machineries etc.

Book value is the strictly recorder value of an asset in the auditing book of the firm.

b)

Summary Introduction

To determine:

After tax proceeds of the sale of the old coffee machine.

c)

Summary Introduction

To determine:

Determining the change in current assets, liabilities and Net working Capital of the firm by the new option.

d)

Summary Introduction

To determine:

Initial investment for the new machine.

Expert Solution & Answer

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See solution

Answer 4

Question

Definition Definition Tax imposed by the government on the "gain" or increase in the value of an asset at the time of its sale by the owner. Capital gain is computed based on the purchase price and sale price of the asset. If the sale price of the asset is more than the purchase price, there is a gain on the sale of asset. A tax is imposed on such gain in accordance with the applicable tax rates at the time of sale.

Chapter 11, Problem 11.14P

a)

Summary Introduction

To determine:

Book value of the existing old asset.

Introduction:

The capital budgeting is the process of making huge investments by the firms to make their capital assets grow faster such as the building of new buildings, purchase of advanced costly machineries etc.

Book value is the strictly recorder value of an asset in the auditing book of the firm.

b)

Summary Introduction

To determine:

After tax proceeds of the sale of the old coffee machine.

c)

Summary Introduction

To determine:

Determining the change in current assets, liabilities and Net working Capital of the firm by the new option.

d)

Summary Introduction

To determine:

Initial investment for the new machine.

Expert Solution & Answer

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Answer 5

Chapter 11, Problem 11.14P

a)

Summary Introduction

To determine:

Book value of the existing old asset.

Introduction:

The capital budgeting is the process of making huge investments by the firms to make their capital assets grow faster such as the building of new buildings, purchase of advanced costly machineries etc.

Book value is the strictly recorder value of an asset in the auditing book of the firm.

b)

Summary Introduction

To determine:

After tax proceeds of the sale of the old coffee machine.

c)

Summary Introduction

To determine:

Determining the change in current assets, liabilities and Net working Capital of the firm by the new option.

d)

Summary Introduction

To determine:

Initial investment for the new machine.

Answer 6

Chapter 11, Problem 11.14P

a)

Summary Introduction

To determine:

Book value of the existing old asset.

Introduction:

The capital budgeting is the process of making huge investments by the firms to make their capital assets grow faster such as the building of new buildings, purchase of advanced costly machineries etc.

Book value is the strictly recorder value of an asset in the auditing book of the firm.

Answer 7

Chapter 11, Problem 11.14P

a)

Summary Introduction

To determine:

Book value of the existing old asset.

Introduction:

The capital budgeting is the process of making huge investments by the firms to make their capital assets grow faster such as the building of new buildings, purchase of advanced costly machineries etc.

Book value is the strictly recorder value of an asset in the auditing book of the firm.

Answer 8

b)

Summary Introduction

To determine:

After tax proceeds of the sale of the old coffee machine.

Answer 9

b)

Summary Introduction

To determine:

After tax proceeds of the sale of the old coffee machine.

Answer 10

c)

Summary Introduction

To determine:

Determining the change in current assets, liabilities and Net working Capital of the firm by the new option.

Answer 11

c)

Summary Introduction

To determine:

Determining the change in current assets, liabilities and Net working Capital of the firm by the new option.

Answer 12

d)

Summary Introduction

To determine:

Initial investment for the new machine.

Answer 13

d)

Summary Introduction

To determine:

Initial investment for the new machine.

Answer 14

Expert Solution & Answer

Answer 15

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Answer 16

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Answer 17

Ch. 11.1 - Prob. 11.1RQ Ch. 11.1 - What three types of net cash flows may exist for a...Ch. 11.1 - Prob. 11.3RQ Ch. 11.1 - Prob. 11.4RQ Ch. 11.2 - Explain how to use each of the following inputs to...Ch. 11.2 - How do you calculate the book value of an asset?Ch. 11.2 - Prob. 11.7RQ Ch. 11.2 - Prob. 11.8RQ Ch. 11.3 - Prob. 11.9RQ Ch. 11.3 - Prob. 11.10RQ

Solution Summary: The author explains the MACRS method of calculating the book value of an asset by subtracting accumulated depreciation costs of the asset from the installed cost.

Concept explainers

Videos

To determine:

After tax proceeds of the sale of the old coffee machine.

To determine:

Determining the change in current assets, liabilities and Net working Capital of the firm by the new option.

To determine:

Initial investment for the new machine.

Want to see the full answer?

Chapter 11 Solutions

Solution Summary: The author explains the MACRS method of calculating the book value of an asset by subtracting accumulated depreciation costs of the asset from the installed cost.

Concept explainers

Videos

To determine: After tax proceeds of the sale of the old coffee machine.

To determine: Determining the change in current assets, liabilities and Net working Capital of the firm by the new option.

To determine: Initial investment for the new machine.

Want to see the full answer?

Chapter 11 Solutions

To determine:

After tax proceeds of the sale of the old coffee machine.

To determine:

Determining the change in current assets, liabilities and Net working Capital of the firm by the new option.

To determine:

Initial investment for the new machine.