Installation costs any added costs that are necessary

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Unformatted text preview: capital Initial investment cost of new asset The net outflow necessary to acquire a new asset. installation costs Any added costs that are necessary to place an asset into operation. installed cost of new asset The cost of the asset plus its installation costs; equals the asset’s depreciable value. after-tax proceeds 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 asset. 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.

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