Case Solution

Case Solution - EmersonCompany 0 1 2 BUYNEWLATHES 4 5 3 6 7...

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Emerson Company BUY NEW LATHES Taxes: 35% 0 1 2 3 4 5 6 7 8 9 10 Req Rate: 13% ITEM Remaining NBV (ea): $6,000  COST -60,000 Salvage Value: $0  WRITE-OFF 4,200 NWC -1,500 New Lathe Data: Number of New Lathes: 2 LABOR SAVING 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 New Machine Cost (ea): $30,000  MAINT. SAVINGS 1,950 1,950 1,950 1,950 1,950 1,950 1,950 1,950 1,950 1,950 9% Included in $30,000 DEPR. XP -6,000 -6,000 -6,000 -6,000 -6,000 -6,000 -6,000 -6,000 -6,000 -6,000 Physical Useful Life (yrs): 10 EBT 3,950 3,950 3,950 3,950 3,950 3,950 3,950 3,950 3,950 3,950 Additional Capacity: 20% Not Matter TAXES -1,383 -1,383 -1,383 -1,383 -1,383 -1,383 -1,383 -1,383 -1,383 -1,383 Free Floor Space Size (sq ft): 250 Not Matter NI 2,568 2,568 2,568 2,568 2,568 2,568 2,568 2,568 2,568 2,568 Rent/Heat/Light Allocation: $3  Not Matter RECAP NWC 1,500 Additional NWC: $1,500  Fully Recovered @ End ADD: DEPR 6,000 6,000 6,000 6,000 6,000 6,000
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This note was uploaded on 11/17/2011 for the course BUS M 301 taught by Professor Jimbrau during the Summer '11 term at BYU.

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