Beckingham Beads Capital Budgeting Solution

Beckingham Beads Capital Budgeting Solution - Information...

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Unformatted text preview: Information for Beckingham Beads Capitalized Amt: $850,250 Straight Line Depreciation $750,000 New Machine Price Salvage Value: $75,000 1 20% $155,050 $44,000 Shipping & Installation Net Amt Capitalized: $775,250 2 20% $155,050 $56,250 Sales Tax (7.5%) 3 20% $155,050 $85,000 Sold Old Machine Old Machine Depreciation 4 20% $155,050 $28,000 Initial NWC BV $50,000 5 20% $155,050 $550,000 Increased Revenue Years Remaining 2 Total: $775,250 $148,000 Additional Expenses Yearly Depreciation: $25,000 Sunk Costs Sell Old Machine @ Time 0 Cannot Sell Old Machine @ Terminal Year $25,000 Market Study $85,000 Sales Price (MV Today) $25,000 Sales Price $18,000 Engineering Designs $50,000 Book Value $- Book Value $35,000 Capital Gain (Loss) $25,000 Capital Gain (Loss) Tax Rate 32% $11,200 Taxes on Gain $8,000 Taxes on Gain Cost of Capital 15% $73,800 Net Cash Flow $(17,000)Net Cash Flow...
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This note was uploaded on 01/04/2012 for the course BUSM 201 taught by Professor Jennlarson during the Fall '11 term at BYU.

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