Question

TTTTTTTTT current yield. 0 beta. Question 21 1 pts A project requires $71,129 of equipment that is classified as a 7-year property. What is the depreciation expense in Year 2 given the following MACRS depreciation allowances, starting with year one: 14.29, 24.49, 17.49, 12.49, 8.93, 8.92, 8.93, and 4.46 percent? Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box Question 22 1 pts A company is considering purchasing an equipment for $39,130. Shipping costs would cost another $7,177. The project would require an initial investment in net working capital of $2,982 which would be recouped at the end of the project. What is the project's initial outlay? Do not enter $ or comma in the answer answer. Enter your final answer of initial outlay as an absolute number (that means, enter it as a positive number). earch

Answer 1

Year 2 depreciation:

Depreciation = Cost of asset * Depreciation rate

Depreciation = $71,129 * 24.49%

Depreciation = $17,419.49.

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Initial cash outlay = cost of asset + shipping cost + Working capital

Initial cash outlay = $39130 + $7,177 + $2,982

Initial cash outlay = $49,289