The president of Real Time Inc. has asked you to evaluate the
proposed acquisition of a new computer. The computer's price is $ 5
0,000, and it falls into the MACRS 3-year class. Purchase of the
computer would require an increase in net operating working capital
of $2,000. The computer would increase the firm's before-tax
revenues by $ 27 ,000 per year but would also increase operating
costs by $ 13 ,000 per year. The computer is expected to be used
for 3 years and then be sold for $25,000. The firm's marginal tax
rate is 40 percent, and the project's cost of capital is 14
percent.
What is the operating cash flow in Year 2? Round
it to a whole dollar, and do not include the $ sign.
Year |
MACRS Percent |
1 |
0.33 |
2 |
0.45 |
3 |
0.15 |
4 |
0.07 |
The president of Real Time Inc. has asked you to evaluate the proposed acquisition of a...
The president of Real Time Inc. has asked you to evaluate the proposed acquisition of a new computer. The computer's price is $ 7 0,000, and it falls into the MACRS 3-year class. Purchase of the computer would require an increase in net operating working capital of $2,000. The computer would increase the firm's before-tax revenues by $ 24 ,000 per year but would also increase operating costs by $ 14 ,000 per year. The computer is expected to be...
The president of Real Time Inc. has asked you to evaluate the proposed acquisition of a new computer. The computer's price is $ 6 0,000, and it falls into the MACRS 3-year class. Purchase of the computer would require an increase in net operating working capital of $2,000. The computer would increase the firm's before-tax revenues by $ 25 ,000 per year but would also increase operating costs by $ 14 ,000 per year. The computer is expected to be...
The president of Real Time Inc. has asked you to evaluate the proposed acquisition of a new computer. The computer's price is $ 5 0,000, and it falls into the MACRS 3-year class. Purchase of the computer would require an increase in net operating working capital of $2,000. The computer would increase the firm's before-tax revenues by $ 26 ,000 per year but would also increase operating costs by $ 17 ,000 per year. The computer is expected to be...
The president of Real Time Inc. has asked you to evaluate the proposed acquisition of a new computer. The computer's price is $40,000, and it falls into the MACRS 3-year class. Purchase of the computer would require an increase in net operating working capital of $ 3 ,000. The computer would increase the firm's before-tax revenues by $20,000 per year but would also increase operating costs by $5,000 per year. The computer is expected to be used for 3 years...
The president of Real Time Inc. has asked you to evaluate the proposed acquisition of a new computer. The computer's price is $40,000, and it falls into the MACRS 3-year class. Purchase of the computer would require an increase in net operating working capital of $ 6 ,000. The computer would increase the firm's before-tax revenues by $20,000 per year but would also increase operating costs by $5,000 per year. The computer is expected to be used for 3 years...
The president of Real Time Inc. has asked you to evaluate the proposed acquisition of a new computer. The computer's price is $40,000, and it falls into the MACRS 3-year class. Purchase of the computer would require an increase in net operating working capital of $ 6 ,000. The computer would increase the firm's before-tax revenues by $20,000 per year but would also increase operating costs by $5,000 per year. The computer is expected to be used for 3 years...
The president of Real Time Inc. has asked you to evaluate the proposed acquisition of a new computer. The computer's price is $40,000, and it falls into the MACRS 3-year class. Purchase of the computer would require an increase in net operating working capital of $ 4 ,000. The computer would increase the firm's before-tax revenues by $20,000 per year but would also increase operating costs by $5,000 per year. The computer is expected to be used for 3 years...
The president of Real Time Inc. has asked you to evaluate the proposed acquisition of a new computer. The computer's price is $ 8 0,000, and it falls into the MACRS 3-year class. Purchase of the computer would require an increase in net operating working capital of $ 7 ,000. The computer would increase the firm's before-tax revenues by $30,000 per year but would also increase operating costs by $ 14 ,000 per year. The computer is expected to be...
The president of Real Time Inc. has asked you to evaluate the proposed acquisition of a new computer. The computer's price is $ 8 0,000, and it falls into the MACRS 3-year class. Purchase of the computer would require an increase in net operating working capital of $ 5 ,000. The computer would increase the firm's before-tax revenues by $30,000 per year but would also increase operating costs by $ 22 ,000 per year. The computer is expected to be...
The president of Real Time Inc. has asked you to evaluate the proposed acquisition of a new computer. The computer's price is $ 8 0,000, and it falls into the MACRS 3-year class. Purchase of the computer would require an increase in net operating working capital of $ 2 ,000. The computer would increase the firm's before-tax revenues by $30,000 per year but would also increase operating costs by $ 14 ,000 per year. The computer is expected to be...