Initial cash outlay necessary to replace existing equipment

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Reference no: EM131910419

A company is evaluating the possible replacement of equipment. New equipment would cost $106,965, and sales tax on the purchase would be 5%. 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 $29,829, 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: EM131910419

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