Need to do a pro-forma statement the solution should be

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Need to do a pro-forma statement, The solution should be around 45,000 something. The question is To replace an old mixer, Mike is considering a new automated mixer that will increase the amount of cookie dough that can be mixed by 500 pounds per day. The new mixer will cost $240,000 installed. The older mixer has been fully depreciated and has not market value, but it will be retained as a backup or for extra capacity if needed. The new mixer is expected to increase revenues by 62,500 per year and to decrease expenses by 22,500 per year. Both revenues and expenses are expected to increase 5% per year. The new mixer will be depreciated on a three year MACRS. Depreciations per Year: Year 1=33.33%, year 2= 44.45%, year 3= 14.81%, year 4= 7.41% and year 5 = 0%. Mike has determined that the value of the average increase in cookies stored in the warehouse will be about $16,000, accounts receivable will increase 4,000 and accounts payable will increase 6,000. These figures should increase with the installation of the mixer.

Reference no: EM13396717

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