1) A new washer costs $13,000. The old one is fully depreciated and can be sold for $4,000. The new washer will last 10 years and save $5,000 per year in expenses. The new washer will be depreciated on a straight line basis to zero. The tax rate is 26% and the required return is 15%. What is the NPV of this project? Answer to 2 decimals places, for example 543.12.
2) Two years ago, your firm bought a new machine for $5,000. The machine was depreciated on a MACRS 3 year schedule. Today, your company will sell the machine for $4,000. The tax rate is 24%. What are the after tax proceeds from the sale? Answer to 2 decimals, for example 105.21.
MACRS 3 Year
Year Amount
1 33.33%
2 44.45%
3 14.81%
4 7.41%