Evaluating the possible replacement of equipment

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Reference no: EM13923063

A company is evaluating the possible replacement of equipment. New equipment would cost $90,913, and sales tax on the purchase would be 3%. Both the purchase price and sales tax would be capitalized. The old equipment had an original purchase price of $70,000 and accumulated depreciation of $32,000 has been taken. The old equipment can be sold currently for $28,222, and the company pays taxes at a rate of 37%. What is the initial cash outlay necessary to replace the existing equipment? Round your answer to the nearest whole dollar.

Reference no: EM13923063

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