Question;E11-1 If Halley Industriesreimburses employees who earn master's degrees and who agree to remain with thefirm for an additional 3 years, should the expense of the tuition reimbursementbe categorized as a capital expenditure or an operating expenditure?E11-2 Iridium Corp. has spent$3.5 billion over the past decade developing a satellite-basedtelecommunication system. It is currently trying to decide whether to spend anadditional $350 million on the project. The firm expects that this outlay willfinish the project and will generate cash flow of $15 million per year over thenext 5 years. A competitor has offered $450 million for the satellites alreadyin orbit. Classify the firm's outlays as sunk costs or opportunity costs, andspecify the relevant cash flows,E11-3 Canvas Reproductions, Inc.,has spent $4,500 dollars researching a new project. The project requires$20,000 worth of new machinery, which would cost $3,000 to install. The companywould realize $4,500 in after-tax proceeds from the sale of old machinery. IfCanvas's working capital is unaffected by this project, what is the initialinvestment amount for this project?E11-4 A few years ago, LargoIndustries implemented an inventory auditing system at an installed cost of$175,000. Since then, it has taken depreciation deductions totaling $124,250.What is the system's current book value? If Largo sold the system for $110,000,how much recaptured depreciation would result?E11-5 Bryson Sciences is planningto purchase a high-powered microscopy machine for $55,000 and incur an additional$7,500 in installation expenses. It is replacing similar microscopy equipmentthat can be sold to net $35,000, resulting in taxes from a gain on the sale of$11,250. Because of this transaction, current assets will increase by $6,000and current liabilities will increase by $4,000. Calculate the initialinvestment in the high-powered microscopy machine.
Paper#45260 | Written in 18-Jul-2015Price : $27