Tremonton Toys Capital Budgeting Solution

Tremonton Toys Capital Budgeting Solution - Information for...

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Unformatted text preview: Information for Tremonton Toys Capitalized Amt: $1,166,148 Straight Line Depreciation $1,013,500 New Machine Price Salvage Value: $80,000 1 20% $217,230 $66,500 Shipping & Installation Net Amt Capitalized: $1,086,148 2 20% $217,230 $86,148 Sales Tax (8.5%) 3 20% $217,230 $105,000 Sold Old Machine Old Machine Depreciation 4 20% $217,230 $88,000 Initial NWC BV $30,000 5 20% $217,230 $1,125,000 Increased Revenue Years Remaining 3 Total: $1,086,148 $398,000 Additional Expenses Yearly Depreciation: $10,000 $80,000 Salvage Value Sunk Costs Sell Old Machine @ Time 0 Cannot Sell Old Machine @ Terminal Year $78,850 Market Study $105,000 Sales Price (MV Today) $17,500 Sales Price $58,000 Engineering Designs $30,000 Book Value $- Book Value $75,000 Capital Gain (Loss) $17,500 Capital Gain (Loss) Tax Rate 34% $25,500 Taxes on Gain $5,950 Taxes on Gain Cost of Capital 17% $79,500 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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