[msheppard]

Proposed new asset (machine) has a purchase price of $50,000, with $3,000 in installation costs. The asset will depreciate over five years, using the straight-line method. The new asset is expected to increase sales by $17,000, and non-depreciation expenses by $2,000 annually over its 5 year life. Due to the increase in sales, we expect an increase of $1,500 in working capital during the asset's life, and the expectation is to be able to sell the asset for $6,000 at the end five years.

The existing asset (machine) was originally purchased three years ago for $25,000, has 5 years remaining, and is depreciating using the straight-line method. The expected salvage value at the end of the asset's life (five years from now) is $5,000. The sale price of the existing asset is $20,000, and its current book value is $15,625.

The marginal tax rate is 34%, and the required rate of return is 12%.

[ma0641]

Don't think I have ever seen so much copied homework questions from 1 person. We do not do your homework. Show us what work you have done and we will help.

[msheppard]

This is for my daughter. None of us understand and we even have top math teachers trying to help us and are unable to. So this was my last resort to try and help. The teacher is not so much help herself. So before you start judging if you can't help then please move on. This is very frustrating with no one able to help and explain so your negative comment just adds to it. If you can help than I appreciate if no thank you too.

[ma0641]

You need to read about posting homework questions first.