Lilian's Lanterns Capital Budgeting Solution

Lilian's Lanterns Capital Budgeting Solution - Information...

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Unformatted text preview: Information for Lilian's Lanterns Capitalized Amt: $2,371,250 Straight Line Depreciation $1,875,000 New Machine Price Salvage Value: $125,000 1 20% $449,250 $365,000 Shipping & Installation Net Amt Capitalized: $2,246,250 2 20% $449,250 $131,250 Sales Tax (7%) 3 20% $449,250 $21,500 Sold Old Machine Old Machine Depreciation 4 20% $449,250 $64,000 Initial NWC BV $25,000 5 20% $449,250 $2,225,550 Increased Revenue Years Remaining 3 Total: $2,246,250 $775,550 Additional Expenses Yearly Depreciation: $8,333 $125,000 Salvage Value Sunk Costs Sell Old Machine @ Time 0 Cannot Sell Old Machine @ Terminal Year $5,000,000 Research & Development $21,500 Sales Price (MV Today) $1,875 Sales Price $77,770 Market Study $25,000 Book Value $- Book Value $82,800 Engineering Designs $(3,500) Capital Gain (Loss) $1,875 Capital Gain (Loss) Tax Rate 40% $(1,400) Taxes on Gain (Loss) $750 Taxes on Gain (Loss)...
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