question archive ST1) The Fleming Company, a food distributor, is considering replacing a filling line at its Oklahoma City warehouse
ST1) The Fleming Company, a food distributor, is considering replacing a filling line at its Oklahoma City warehouse
Subject:FinancePrice: Bought3
ST1) The Fleming Company, a food distributor, is considering replacing a filling line at its Oklahoma City warehouse. The existing line was purchased several years ago for $600,000. The line’s book value is $200,000, and Fleming management feels it could be sold at this time for $150,000. A new, increased capacity line can be purchased for $1,200,000. Delivery and installation of the new line are expected to cost an additional $100,000. Assuming Fleming’s marginal tax rate is 40 percent, calculate the net investment for the new line.
