Bryson Sciences is planning to purchase a high-powered microscopy machine for$55,000 and incur an additional $7,500 in installation expenses. It is replacing sim-ilar microscopy equipment that can be sold to net $35,000, resulting in taxes from again on the sale of $11,250. Because of this transaction, current assets will increaseby $6,000 and current liabilities will increase by $4,000. Calculate the initial invest-ment in the high-powered microscopy machine.

Initial Investment: It represents the initial cost required to start a project or business. It…

Answered: by $6,000 and current liabilities will…

by $6,000 and current liabilities will increase by $4,000. Calculate the initial invest- ment in the high-powered microscopy machine.

Fundamentals Of Financial Management, Concise Edition (mindtap Course List)

10th Edition

ISBN:9781337902571

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter12: Cash Flow Estimation And Risk Analysis

Section: Chapter Questions

Problem 10P: Dauten is offered a replacement machine which has a cost of 8,000, an estimated useful life of 6...

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

Bryson Sciences is planning to purchase a high-powered microscopy machine for
$55,000 and incur an additional $7,500 in installation expenses. It is replacing sim-
ilar microscopy equipment that 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 $6,000 and current liabilities will increase by $4,000. Calculate the initial invest-
ment in the high-powered microscopy machine.

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