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Unformatted text preview: capital
Initial investment cost of new asset
The net outflow necessary to
acquire a new asset.
Any added costs that are
necessary to place an asset into
installed cost of new asset
The cost of the asset plus its
installation costs; equals the
asset’s depreciable value.
from sale of old asset
The difference between the old
asset’s sale proceeds and any
applicable taxes or tax refunds
related to its sale.
proceeds from sale of old asset
The cash inflows, net of any
removal or cleanup costs, resulting from the sale of an existing
tax on sale of old asset
Tax that depends on the relationship among the old asset’s sale
price, initial purchase price, and
book value, and on existing
government tax rules. associated with a capital expenditure are the installed cost of the new asset, the
after-tax proceeds (if any) from the sale of an old asset, and the change (if any) in
net working capital. Note that if there are no installation costs and the firm is not
replacing an existing asset, then the purchase...
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This document was uploaded on 01/19/2014.
- Fall '13