The Supreme Sh

Replacement Analysis
Old machine New Machine
Price 40000 75000
Shipping And Install 0 6000
Orignal Life 10 5
Current Life 5 5
Orignal Salvage Value 0 15000
Current Salvage Value 22000 0
Book Value 20000 81000
Incrases in raw Material 0 3000
Depriciation 4000 13,200.00
Salaries 29000 0
Maintainance 6000 5000
Defects 4000 2000
Marginal Tax rate 34
Required retrun 15

Cash Flows
Initial Outlay -62680
Annual after Tax Saving 21120
Depriciation Tax Benefit 3128
Total ATCF 24248
Terminal Cash Flow 18000
The Supreme Shoe Company
Replacement Analysis
Difference

-9,200.00
29,000.00
1,000.00
2,000.00
Year Sales cogs

1 1890532 1570200
2 2098490 1695694 6000000
3 2350308 1992400 f(x) = 525244.6 x + 1148532.2
R² = 0.980047418339011
4 3432000 2864000 5000000
5 3850000 3250000 3500000
4500000
6 4300000 4000000
7 4825244 4000000
3000000
8 5350489 3500000
3000000
2500000
3000000
2000000
2500000
2000000
1500000
1000000
1500000
1000000
10000000
1 2 3 4 5 6 7 8 9
500000
0
0
0.5 1 1.5 2 2.5 3 3.5 4 4.5 5
1890532 2098490 2350308 34320
1148532.2
39011

Column D
Linear (Column D)

Column
Column DE

5 6 7 8 9

2.5 3 3.5 4 4.5 5 5.5

0 2350308 3432000