Finance Assignment | Top Essay Writing
March 18th, 2020
In Capsim, investment in plant & equipment (including automation) is depreciated on a straight-line basis over 15 years. Imagine the firm you inherited has 1st shift capacity of 1,200,000 units at an automation level of 5. The original cost of this capacity was $31.2 million.
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Because the machines are 4 years old, 4/15 of the value has been depreciated. Because you only currently sell 800,000 units of the related product per year, you decide to sell 600,000 units of capacity. Selling capacity recoups 65% of the original purchase price. What will be the gain/loss for this transaction on the income statement?
a) $10,140,000
b) $4,160,000
c) -$1,300,000
d) $15,600,000. Get Finance homework help today