Lake power sports sells jet skis and other powered recreational equipment/ customers pay one-third of the sales price of a jet ski when they initially purchase the ski, and then pay another one-third each year for the next two years. because lake has little information about the ability to collect these receivables, it uses cost recovery method to recognize revenue on these installment sales. in 2015, lake began operations and sold jet skis with a total price of $1,020,000 that cost lake $510,000. lake collected $340,000 in 2015, $340,000 in 2016, and $340,000 in 2017 associated with those sales. in 2016, lake sold jet skis with a total price of $1,920,000 that cost lake $1,152,000. lake collected $640,000 in 2016, $512,000 in 2017, and $512,000 in 2018associated with those sales. in 2018, lake also repossessed $256,000 of jet skis that were sold in 2016. those jet skis has a fair value of $96,000 at the time they were repossessed. in 2017, lake would recognize realized gross profit of: a. $0b. $340,000c. $852,000d. $650,000

The gilbert instrument corporation is considering replacing the wood steamer it currently uses to shape guitar sides. the steamer has 6 years of remaining life. if kept, the steamer will have depreciaiton expenses of $650 for five years and $325 for the sixthyear. its current book value is $3,575, and it can be sold on an internet auction site for$4,150 at this time. if the old steamer is not replaced, it can be sold for $800 at the endof its useful life. gilbert is considering purchasing the side steamer 3000, a higher-end steamer, whichcosts $12,000 and has an estimated useful life of 6 years with an estimated salvage value of$1,500. this steamer falls into the macrs 5-year class, so the applicable depreciationrates are 20.00%, 32.00%, 19.20%, 11.52%, 11.52%, and 5.76%. the new steamer is fasterand allows for an output expansion, so sales would rise by $2,000 per year; the newmachine's much greater efficiency would reduce operating expenses by $1,900 per year. to support the greater sales, the new machine would require that inventories increase by$2,900, but accounts payable would simultaneously increase by $700. gilbert's marginalfederal-plus-state tax rate is 40%, and its wacc is 15%.a. should it replace the old steamer? b. npv of replace = $2,083.51