Question

Bobby Jones, the club pro at Pebble Beach Golf Club, is considering replacing his fleet of golf certs. He bought the exlsting fleet of 120 EZ-G0 certs two years ago for $2,000 per cart. He is considering replacing them with a new model Club Car. Each Club Car has GPS, a cooler and a hallidub dleaner. Each Club Car costs $3,200 The galf carts an 5 year praparty (MACRS depreciation rates are shavwn in the tabla EB Ifha sold the EZ-GO carts today he could gt $760 far each cart Ona advantaga of buying the naw carts is that thay ara more durabka and so Bobby car carry a smaler invenlory of spare parts. Bouby ligures his invenlory will drop by 525 000. IF Jones replaces the carts, then he expecls to atlrad mure golers because gallers prefer courses where the carts have GPS. Jones service the additional golfers at an arnual cast af $25,500 lf Mr Jones gues a lead with he olf car replacer en he expects u keep the new ca s or ree years at are le annua uperating cash flows the second ear? ssurne a la rate o 3 % ssume tha the re lacemen occurs rimediate bu pera ng cash flows uccur a year end. So, thefirs year of operating cash fows associated with the replacement wil happen one year from today expects 125 exlra foursomes per year and each foursome generates ST90 in revernues. Jornes expects to have lo hire one addilioal staff member to

I am unsure on how to calculate the numbers in the box: Depreciation Expense, Ending Book Value, and I am very confused on how to calculate the Incremental Depreciation.