CB123 (2) - Big B Coffee Shop Initial Investment Sale of...

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Big B Coffee Shop Initial Investment FCF Terminal Value Irrelevant Sale of old machine (+) Add'l Revenues (+) Decrease in NWC (+) Buy New Machine (-) Add'l Costs (-) Sale of new machine (+) Tax benefit from old machine sale (+) Increase in NWC (-) Tax Liability (new Machine) (-) Increase in NWC (-) Depreciation Tax Benefit (+) Taxes (-)
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FI455 - FS2011 Homework 3 Due Date Tuesday 10/6/2011 by 11:59pm Student ID(s) --> Name(s) --> Grade out of Comments Professional look 5 Correct answers 10 Use of Excel tools 10 Total 0 25
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Big B Coffeeshop is considering the replacement of one of its existing expresso machines with a new, more automated The old machine was bought five years ago for $96,864 . It is being depreciated on a straight-line basis over a 10 accounting for a salvage value of $15,000 . The machine could be sold today at $23,950 . The new machine will cost $67,699 and its depreciable life is 5 years with a resale value of $15,900 . The machine will be depreciated down to zero over its life time via the straight-line method.
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This note was uploaded on 10/07/2011 for the course ECON 101 taught by Professor Ramiz during the Spring '11 term at Abilene Christian University.

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CB123 (2) - Big B Coffee Shop Initial Investment Sale of...

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