Durable Inc

question 77

Essay

Durable Inc.is considering replacing an old drilling machine that cost $200,000 six years ago with a new one that costs $450,000.Shipping and installation cost an additional $60,000.The old machine has been depreciated using straight-line method with no salvage value over an estimated 8-year useful life.The old machine can be sold for $40,000 now or $10,000 in two years.Management expects increases in inventories of $10,000, accounts receivable of $32,000, and accounts payable of $12,000 if the new machine is acquired.Durable's income tax rate is expected to be 30 percent over the years affected by the investment.
Required: What is Durable's net initial investment (i.e., its after-tax initial cash outlay for the machine)?

Understand the concept and implications of purported partnership and liability.

Grasp the liability obligations of professional shareholders in a corporation.

Know the requirements for enforceable partnership agreements under specific conditions.

Understand the principles of gene regulation and expression.

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Definitions:

Expected Costs

Anticipated or forecasted costs for a project, activity, or production based on historical data, current conditions, and future projections.

Total Fixed Cost

The aggregate sum of all expenses within a company that remain constant regardless of the level of production or sales.

Fixed Cost Per Period

Costs that do not vary with the level of production or sales within a certain range and time frame, such as rent or salaries.

Mixed Cost

A cost that contains both variable and fixed cost elements and changes in total with the level of activity, but not proportionately.