DuPree Coffee? Roasters, Inc., wishes to expand and modernize its facilities. The installed cost of a proposed? computer-controlled automatic-feed roaster will be $130,000. The firm has a chance to sell its 5?-year-old roaster for $35,900. The existing roaster originally cost $59,900 and was being depreciated? straight-line over 7 years. DuPree pays taxes at a rate of 40%.
a. What is the book value of the existing? roaster?
b. Calculate the? after-tax proceeds of the sale of the existing roaster.
c. Calculate the change in net working capital using the following? figures:
Accruals: −$20,100
Inventory: $49,800
Accounts payable: $39,100
Accounts receivable: $70,300
Cash: $0
Notes payable: $15,700
d. Calculate the initial investment associated with the proposed new roaster.