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Intro BKM Industries spent $10,000 on a feasibility study to expand its production capacity. The company...
Intro BKM Industries spent $10,000 on a feasibility study to expand its production capacity. The company decided to go ahead with the expansion: It will need to buy a new machine for $51,000 and spend $8,000 on installing it. The machine will be depreciated linearly to zero over a 5-year period and it will have no salvage value. The machine will create $73,000 in incremental revenues per year and $51,100 in incremental costs per year. The company's marginal tax rate...
Problem 10 Intro Better Tires Corp. is planning to buy a new tire making machine for $80,000 that would save it $80,000 per year in production costs. The savings would be constant over the project's 3-year life. The machine is to be linearly depreciated to zero and will have no resale value after 3 years. The appropriate cost of capital for this project is 15% and the tax rate is 21%. Part 1 18 - Attempt 1/5 for 10 pts....
Intro 8 years ago, a new machine cost $8 million to purchase and an additional $490,000 for the installation. The machine was to be linearly depreciated to zero over 15 years. The company has just sold the machine for $4.8 million, and its marginal tax rate is 25%. Part 1 Attempt 1/5 for 10 pts. What is the annual depreciation? No decimals Submit IB Attempt 1/5 for 10 pts. Part 2 What is the current book value? No decimals Submit...
Intro 8 years ago, a new machine cost $8 million to purchase and an additional $490,000 for the installation. The machine was to be linearly depreciated to zero over 15 years. The company has just sold the machine for $4.8 million, and its marginal tax rate is 25% Attempt 1/5 for 10 pts. Part 1 What is the annual depreciation? No decimals Submit IB Attempt 1/5 for 10 pts. Part 2 What is the current book value? No decimals Submit...
Intro Consider a project with a 4-year life. The initial cost to set up the project is $100,000. This amount is to be linearly depreciated to zero over the life of the project and there is no salvage value. The required return is 15% and the tax rate is 34%. You've collected the following estimates: Base case Pessimistic Optimistic Unit sales per year (Q) 7,000 5,000 9,000 Price per unit (P) 50 4 0 Variable cost per unit (VC) 20...
Yoder Technologies is considering expanding its production capacity by purchasing a new machine, the TB-2000. The cost of the TB-2000 is $3 million. Unfortunately, installing this machine will take several months and will partially disrupt production. The firm has just completed a $50,000 feasibility study to analyze the decision to buy the TB-2000, resulting in the following estimates: • Marketing: Once the TB-2000 is operating next year, the extra capacity is expected to allow for $12 million per year in...
Yoder Technologies is considering expanding its production capacity by purchasing a new machine, the TB-2000. The cost of the TB-2000 is $3 million. Unfortunately, installing this machine will take several months and will partially disrupt production. The firm has just completed a $50,000 feasibility study to analyze the decision to buy the TB-2000, resulting in the following estimates: • Marketing: Once the TB-2000 is operating next year, the extra capacity is expected to allow for $12 million per year in...
Intro Bubble Tree Inc. had a taxable income of $380,000 last year. Its average tax rate is 27% and it paid out $120,000 in dividends to preferred stockholders. The company has 16,000 shares of common stock outstanding. Part 1 IS Attempt 1/10 for 10 pts. What were Bubble Tree's earnings per share of common stock (EPS)? 1+ decimals Submit Part 2 - Attempt 1/10 for 10 pts. If Bubble Tree pays out a dividend of $7.87 for each share of...
Intro Nollaney Corp. had $43,000 in cash at the end of 2013 and $72,000 at the end of 2014. The firm invested a total of $222,000 in property, plant, and equipment. Total cash flow from financing activities was +$260,000. Attempt 1/10 for 10 pts. Part 1 What was the cash flow from operating activities? No decimals Submit Attempt 1/10 for 10 pts. Part 2 If accounts receivable and inventories increased by $85,000 (total), accounts payable increased by $14.000, and depreciation...
Problem 10 Intro A new project is expected to generate annual sales of $130,000 and annual costs of $123,500. Annual depreciation attributable to the project is $60,000. The marginal tax rate is 34%. Part 1 IB Attempt 1/5 for 10 pts. What is the supplemental operating cash flow in each year of operation? No decimals Submit