SmartExpert

(118)

$30/per page/Negotiable

About SmartExpert

Levels Tought:
Elementary,Middle School,High School,College,University,PHD

Expertise:
Accounting,Business & Finance See all
Accounting,Business & Finance,Economics,English,HR Management,Math Hide all
Teaching Since: Apr 2017
Last Sign in: 60 Weeks Ago, 5 Days Ago
Questions Answered: 7570
Tutorials Posted: 7352

Education

  • BS,MBA, PHD
    Adelphi University/Devry
    Apr-2000 - Mar-2005

Experience

  • HOD ,Professor
    Adelphi University
    Sep-2007 - Apr-2017

Category > Accounting Posted 21 Nov 2017 My Price 5.00

New York Pizza is considering replacing an existing oven with a new, more sophisticated oven

New York Pizza is considering replacing an existing oven with a new, more sophisticated oven. The old oven was purchased three years ago at a cost of $20,000, and this amount was being depreciated under MACRS using a five-year recovery period. The oven has five years of usable life remaining. The new oven being considered costs $30,500, requires $1,500 in installation costs, and would be depreciated under MACRS using a five-year recovery period. The old oven can currently be sold for $22,000, without incurring any removal or cleanup costs. The firm pays taxes at a rate of 40 percent on both ordinary income and capital gains. The revenues and expenses (excluding depreciation) associated with the new and the old machines for the next five years are given in the following table.

a. Calculate the initial cash outflow associated with replacement of the old oven by the new one.

b. Determine the incremental cash flows associated with the proposed replacement. Be sure to consider the depreciation in year 6.

c. Depict on a time line the relevant cash flows found in parts (a) and (b), associated with the proposed replacement decision.

Answers

SmartExpert
(118)
Status NEW Posted 21 Nov 2017 03:11 AM My Price 5.00

New----------- Yo-----------rk -----------Piz-----------zaÂ----------- -----------

Attachments

file 1511236183-New York Pizza.docx preview (680 words )
N-----------ew -----------Yor-----------k P-----------izz-----------a i-----------s c-----------ons-----------ide-----------rin-----------g r-----------epl-----------aci-----------ng -----------an -----------exi-----------sti-----------ng -----------ove-----------n w-----------ith----------- a -----------new-----------, m-----------ore----------- so-----------phi-----------sti-----------cat-----------ed -----------ove-----------n. -----------The----------- ol-----------d o-----------ven----------- wa-----------s p-----------urc-----------has-----------ed -----------thr-----------ee -----------yea-----------rs -----------ago----------- at----------- a -----------cos-----------t o-----------f $-----------20,-----------000-----------, a-----------nd -----------thi-----------s a-----------mou-----------nt -----------was----------- be-----------ing----------- de-----------pre-----------cia-----------ted----------- un-----------der----------- MA-----------CRS----------- us-----------ing----------- a -----------fiv-----------e-y-----------ear----------- re-----------cov-----------ery----------- pe-----------rio-----------d. -----------The----------- ov-----------en -----------has----------- fi-----------ve -----------yea-----------rs -----------of -----------usa-----------ble----------- li-----------fe -----------rem-----------ain-----------ing-----------. T-----------he -----------new----------- ov-----------en -----------bei-----------ng -----------con-----------sid-----------ere-----------d c-----------ost-----------s $-----------30,-----------500-----------, r-----------equ-----------ire-----------s $-----------1,5-----------00 -----------in -----------ins-----------tal-----------lat-----------ion----------- co-----------sts-----------, a-----------nd -----------wou-----------ld -----------be -----------dep-----------rec-----------iat-----------ed -----------und-----------er -----------MAC-----------RS -----------usi-----------ng -----------a f-----------ive------------ye-----------ar
Not Rated(0)