ZuoTi.Pro
Question

A proposed cost-saving device has an installed cost of $654,000. The device will be used in...

A proposed cost-saving device has an installed cost of $654,000. The device will be used in a five-year project but is classified as three-year MACRS (MACRS Table) property for tax purposes. The required initial net working capital investment is $48,500, the marginal tax rate is 30 percent, and the project discount rate is 15 percent. The device has an estimated Year 5 salvage value of $73,500.

  

What level of pretax cost savings do we require for this project to be profitable? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g.,32.16.)

  

Pretax savings ____$ ?

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

Home nert Page Layout Formulas Data Review View dd-Ins 111.: ^. --9- wrap Text General Copy Conditional Fomat yell Inserta Formatぶutos mh A Paste Format Painter B l U. -...Δ.-== Merge & Center. $ , % , , , 1 conditional Format Cell Insert Delete Format 2 ClearFe Select Edting Clipboard TD557 TD er TE TF TI TK TL TCO 539 NOTE 1 540 NOTE 2 SALVAGE VALUE AT THE END OF 5 YEARS BOOK VALUE AT THE END OF 6 YEARS- PROFIT ON SALE TAX ON PROFIT ON SALE OF ASSET AFTER TAX SALVAGE VALUE COST MACRS 654000 73500 A 41 YEAR MACRS DEPRECIATION YEAR BOOK VA LUE COST -DEPRE 542 543 544 545 546 547 548 TAX SAVING DUE TO DEPRECIATION 549 50 YEAR DEPRE 551 552 553 554 33.33 44.45 14.81 7.41 217978.20 290703.00 96857.40 48461.40 436021.80 145318.80 48461.40 0.00 73500 C-A-B 220503096°C 51450 4. PVFACTOR AT 15% PV OF TAX SAVING 0.869656863.88 0.7561 65943.97 0.6575 19105.59 0.5718 8312.39 0.00 150225.83 TAX 3096 1217978.20 290703.00 3 96857.40 4 48461.40 65393.46 87210.9 29057.22 14538.42 0 0.4972 556 557 PV OF TAX SAVING NPV IRR REPLACEMENT S HPR GMAM EAC MACRS LEASE RATIOCASHBUDGET Wacc BOND EPS EBIT REPLACEMENT STats NPV BETA LEVERED rences: DX15 130% 02:12 01-02-2019Home nert Page Layout Formulas Data Review View dd-Ins Cut Σ AutoSum ー E ゴWrap Text General ta copy. в 1 프 . Ej-., Δ. : rーー 逻锂函Merge & Center. $, % , 弼,8 C Paste Conditional Format CeInsert Delete Format Formatting, as Table w styles. ▼ ㆆ ▼ Sort &Find & 2 ClearFe Select Edting Format Painter Clipboard TD572 TD Font Alignment Number Styles Cells TE TF TG TH TJ TK TL TM TN TO 560 561 562 563 564 565 566 567 568 569 570 571 572 573 574 575 576 577 578 PV OF OPERATING CASH FLOWPV OF TAX SAVING DUE TO DEPRECIATION PV OF AFTER TAX SALVAGE VALUE PV OF RECOVERY OF WORKING CAPITAL-COST OF MACHINE & WORKING CAPITAL (x(1-0.30) X PVIFA@ 15%, 5 YEARS + 150225.83 + (51450 X PVIF@15%, 5 YEARS) + (48500 XPVIF @ 15%, 5 YEARS)-654000-48500 (X (1-0.30) X 3.3521551 150225.83 (51450 X0.4971767) (48500 X0.4971767)- 654000-48500 2.346508569 (X) - 502581.36 214182.62 PRE TAX SAVINGS EVERY YEAR (4 トト MIRR NPV İRR REPLACEMENT S HPR GMAM EAC MACRS LEASE- , RATIOCASHBUDGET / wacc . BOND /EPS EBIT REPLACEMENT (STats | NPV . BETA LEVERED - - erences: AJ43 福 130% 02:25 01-02-2019

0 0
Add a comment
Know the answer?
Add Answer to:
A proposed cost-saving device has an installed cost of $654,000. The device will be used in...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • A proposed cost-saving device has an installed cost of $654,000. The device will be used in...

    A proposed cost-saving device has an installed cost of $654,000. The device will be used in a five-year project but is classified as three-year MACRS (MACRS Table) property for tax purposes. The required initial net working capital investment is $48,500, the marginal tax rate is 30 percent, and the project discount rate is 15 percent. The device has an estimated Year 5 salvage value of $73,500.    What level of pretax cost savings do we require for this project to...

  • A proposed cost-saving device has an installed cost of $665,000. The device will be used in...

    A proposed cost-saving device has an installed cost of $665,000. The device will be used in a five-year project but is classified as three-year MACRS property for tax purposes. The required initial net working capital investment is $75,000, the marginal tax rate is 24 percent, and the project discount rate is 13 percent. The device has an estimated Year 5 salvage value of $62,000. What level of pretax cost savings do we require for this project to be profitable? MACRS...

  • A proposed cost-saving device has an installed cost of $735,000. The device will be used in...

    A proposed cost-saving device has an installed cost of $735,000. The device will be used in a five-year project but is classified as three-year MACRS property for tax purposes. The required initial net working capital investment is $145,000, the marginal tax rate is 23 percent, and the project discount rate is 11 percent. The device has an estimated Year 5 salvage value of $104,000. What level of pretax cost savings do we require for this project to be profitable? MACRS...

  • A proposed cost-saving device has an installed cost of $660,000. The device will be used in...

    A proposed cost-saving device has an installed cost of $660,000. The device will be used in a five-year project but is classified as three-year MACRS property for tax purposes. The required initial net working capital investment is $70,000, the marginal tax rate is 23 percent, and the project discount rate is 12 percent. The device has an estimated Year 5 salvage value of $59,000. What level of pretax cost savings do we require for this project to be profitable? MACRS...

  • A proposed cost-saving device has an installed cost of $815,000. The device will be used in...

    A proposed cost-saving device has an installed cost of $815,000. The device will be used in a five-year project but is classified as three-year MACRS property for tax purposes. The required initial net working capital investment is $87,000, the marginal tax rate is 21 percent, and the project discount rate is 11 percent. The device has an estimated Year 5 salvage value of $133,000. What level of pretax cost savings do we require for this project to be profitable? MACRS...

  • A proposed cost-saving device has an installed cost of $760,000. The device will be used in...

    A proposed cost-saving device has an installed cost of $760,000. The device will be used in a five-year project but is classified as three-year MACRS property for tax purposes. The required initial net working capital investment is $65,000, the marginal tax rate is 25 percent, and the project discount rate is 8 percent. The device has an estimated Year 5 salvage value of $100,000. What level of pretax cost savings do we require for this project to be profitable? MACRS...

  • A proposed cost-saving device has an installed cost of $750,000. The device will be used in a five-year project but is...

    A proposed cost-saving device has an installed cost of $750,000. The device will be used in a five-year project but is classified as three-year MACRS property for tax purposes. The required initial net working capital investment is $61,000, the marginal tax rate is 23 percent, and the project discount rate is 10 percent. The device has an estimated Year 5 salvage value of $94,000. What level of pretax cost savings do we require for this project to be profitable? MACRS...

  • A proposed cost-saving device has an installed cost of $810,000. The device will be used in...

    A proposed cost-saving device has an installed cost of $810,000. The device will be used in a five-year project but is classified as three-year MACRS property for tax purposes. The required initial net working capital investment is $85,000, the marginal tax rate is 25 percent, and the project discount rate is 10 percent. The device has an estimated Year 5 salvage value of $130,000. What level of pretax cost savings do we require for this project to be profitable?

  • A proposed cost-saving device has an installed cost of $450,000.    The device will be used in...

    A proposed cost-saving device has an installed cost of $450,000.    The device will be used in a five-year project, but is classified as three-year MACRS property for tax purposes. The required initial net working capital investment is $30,000, the marginal tax rate is 35 percent, and the project discount rate is 12 percent.   The device has an estimated Year 5 salvage value of $75,000. What level of per year pretax cost savings do we require for this project to be profitable?...

  • A proposed cost-saving device has an installed cost of $760,000. The device will be used in...

    A proposed cost-saving device has an installed cost of $760,000. The device will be used in a five-year project but is classified as three-year MACRS property for tax purposes. The required initial net working capital investment is $65,000, the tax rate is 25 percent, and the project discount rate is 8 percent. The device has an estimated Year 5 salvage value of $100,000. What level of pretax cost savings do we require for this project to be profitable? MACRS schedule...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT