(Answered) Vastine medical inc is considering replacing its existing

Finance

Vastine Medical, Inc., is considering replacing its existing computer system, which was purchased 2 years ago at a cost of $325,000. The system can be sold today for $200,000. It is being depreciated using MACRS and a 5-year recovery period. A new computer system will cost $500,000 to purchase and install. Replacement of the computer system would not involve any change in net working capital. Assume a 40% tax rate.

a. Calculate the book value of the existing computer system.

b. Calculate the after-tax proceeds of its sale for $200,000.

c. Calculate the initial investment associated with the replacement project.

View complete question

Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91866138
Price:- $10

Verified Expert

Priced at $20 Now at $10, Verified Solution

Have any Question?Write your Review or question?

Related Questions in Basic Finance

Company rapid growth is considering the following

Company Rapid Growth is considering the following project: Year 0 1 2 3 4 5 Cash Flows- $80500 $10000 $26000 $33800 $37200 $59100 What's the payback period of the project?

1 there are three investments you are consideringinvestment

1. There are three investments you are considering: Investment 1: A saving account with an interest rate of 6% compounded daily. Investment 2: An investment fund guarantees it will pay 6.15% compounded annually. Investme ...

A firm has 21000000 of available retained earnings the

A firm has $21,000,000 of available retained earnings. The capital structure is 48% debt, 8% preferred equity and 44% common equity. At what point in total funding will the company exhaust its available retained earnings ...

If you deposit 870 at 2400annual interest compounded daily

If you deposit $870 at 24.00%annual interest compounded daily, how much money will be in the account after 24 years? (Assume that there are 364 days in a year) Suppose you deposit $194 today, $660 in one year, and $615 i ...

Old xyz corp has total assets of 1000000 and a debt ratio

Old XYZ Corp has total assets of $1,000,000 and a debt ratio of 30%. Currently it has sales of $2,500,000, total fixed costs of $1,000,000, and EBIT of $50,000. If XYZ pays 6% interest on debt, what is XYZ's ROE?

Suppose you want to raise 15m for a new machine you plan to

Suppose you want to raise $15m for a new machine. You plan to raise the funds by selling 20-year $1,000 bonds with a semi-annual coupon rate of 5% and 8% yield. Before putting the bonds to market, inflation drops half a ...

We have the following investments in our

We have the following investments in our portfolio: Investment Amount Expected Return Beta A Stock $2,000 ...

A firm has sales of 3540000 costs of 3260000 interest

A firm has sales of $3,540,000, costs of $3,260,000, interest expense of $70,000, and a tax rate of 28%. The firm paid $95,000 in cash dividends. What is the addition to retained earnings for the period?

What is the standard hedge fund hf compensation structure

What is the standard hedge fund (HF) compensation structure and how do high watermark provision benefit or impose costs on HF investors?

Trevi corporation recently reported an ebitda of 31400 and

Trevi Corporation recently reported an EBITDA of $31,400 and $9,500 of net income. The company has $6,900 interest expense, and the corporate tax rate is 35 percent. What was the company's depreciation and amortization e ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Basic Finance Expert