Homework Answers
The machine is fully depreciated. This means the book value = $0.
After tax salvage value = Pretax salvage value * (1 - Tax Rate)
After tax salvage value = $15,000 * (1 - 37%)
After tax salvage value = $9,450
Additionally the initial working capital invested would also be release = $9,450 + $7,000 = $16,450
Add Answer to:
UC.Cung courses/91044/4042es/I 02 red Question 5 0/1 pts For a new project, you purchase a new...
Your company is considering the purchase of a new machine. After 4 years of operation, you...
Your company is considering the purchase of a new machine. After 4 years of operation, you would sell the machine for a salvage value of $62299. However, at that time the machine would not have been depreciated to a value of 0, but have a remnant book value of $25204. The operation of the machine requires additional NOWC of $24511, which would not change throughout the project. The firm's corporate tax rate is 40%. What is the project's Terminal Cash...
Marshall-Miller & Company is considering the purchase of a new machine for $50,000, installed. The machine...
Marshall-Miller & Company is considering the purchase of a new machine for $50,000, installed. The machine has a tax life of 5 years. Under the new tax law, the machine is eligible for 100% bonus depreciation, so it will be fully depreciated at t= 0. The firm expects to operate the machine for 4 years and then to sell it for $21,500. If the marginal tax rate is 25%, what will the after-tax salvage value be when the machine is...
Sway's Back Store is considering a project which will require the purchase of $5 million in...
Sway's Back Store is considering a project which will require the purchase of $5 million in new equipment. The equipment will be depreciated straight-line to a book value of $0.5 million over the 5-year life of the project. Annual sales from this project are estimated at $950,000. The variable cost is 40% of the annual sales and there is an annual fixed cost of $100,000. Sway's Back Store will sell the equipment at the end of the project for a...
use the Best Answer Question 16 1 pts You are considering investing in a project that...
use the Best Answer Question 16 1 pts You are considering investing in a project that increases annual costs by $35,000 per year over the project's 5 year life. The project has an initial cost of $500,000 and will be depreciated straight-line over 5 years to a salvage value of zero. Assume a 34% tax bracket and a discount rate of 11%. What is the NPV of this project? -$444,561.54 -$231,765,90 -$435,321.80 -$341,889.65 -S459,714.72 - Previous Next →
Movies, Inc. is considering a new project producing educational movies for children. The project requires an investment...
Movies, Inc. is considering a new project producing educational movies for children. The project requires an investment in equipment of $1,800,000. The equipment will be fully depreciated using straight line depreciation over its 8 year accounting life. At the end of the project the firm expects to be able to sell the equipment for $125,000. The firm expects to sell 475,000 million videos each year for 5 years. The retail price for each video will be $20.00 and variable costs...
Graziano Corporation (GC) is considering a project to purchase new equipment. The equipment would be depreciated...
Graziano Corporation (GC) is considering a project to purchase new equipment. The equipment would be depreciated by the straight-line method over its 3-year life and would have a zero-salvage value. The project requires an investment of $6,000 today on net working capital. Revenues and other operating costs are expected to be constant over the project's 3-year life. However, this project would compete with other company’s products and would reduce its pre-tax annual cash flows of $5,000 per year. The investment...
Question 5 1 pts A pharmaceuticals company has accepted a project that is expected to increase...
Question 5 1 pts A pharmaceuticals company has accepted a project that is expected to increase revenues by $30,000 a year and cash expenses by $10,000 a year. The project will require the purchase of some new equipment that will increase depreciation expenses by $12,000 a year. Net working capitalis also expected to increase by $3,000 annually. The firm is in the 40% marginal tax bracket. What is the change in operating cash flows? $16,800 0 $13,800 $4,800 $12,200 $11,800
Graziano Corporation (GC) is considering a project to purchase new equipment. The equipment would be depreciated...
Graziano Corporation (GC) is considering a project to purchase new equipment. The equipment would be depreciated by the straight-line method over its 3-year life and would have a zero-salvage value. The project requires an investment of $6,000 today on net working capital. Revenues and other operating costs are expected to be constant over the project's 3-year life. However, this project would compete with other company’s products and would reduce its pre-tax annual cash flows of $5,000 per year. The investment...
IBT Tech Inc is considering a new 3-year investment project that requires an initial fixed asset...
IBT Tech Inc is considering a new 3-year investment project that requires an initial fixed asset investment of $4.49 million. The fixed asset will be depreciated straight-line to zero over its three-year life. The project is estimated to generate $2,950,000 in sales per year with additional costs of $952,000 per year. The tax rate is 30% and the required return (appropriate discount rate) is 16%. The fixed asset should have a market (or salvage) value of $595,000 at the end...
IBT Tech Inc is considering a new 3-year investment project that requires an initial fixed asset...
IBT Tech Inc is considering a new 3-year investment project that requires an initial fixed asset investment of $4.49 million. The fixed asset will be depreciated straight-line to zero over its three-year life. The project is estimated to generate $3,010,000 in sales per year with additional costs of $905,000 per year. The tax rate is 30% and the required return (appropriate discount rate) is 16%. The fixed asset should have a market (or salvage) value of $595,000 at the end...
Marshall-Miller & Company is considering the purchase of a new machine for $50,000, installed. The machine has a tax life of 5 years. Under the new tax law, the machine is eligible for 100% bonus depreciation, so it will be fully depreciated at t= 0. The firm expects to operate the machine for 4 years and then to sell it for $21,500. If the marginal tax rate is 25%, what will the after-tax salvage value be when the machine is...
use the Best Answer Question 16 1 pts You are considering investing in a project that increases annual costs by $35,000 per year over the project's 5 year life. The project has an initial cost of $500,000 and will be depreciated straight-line over 5 years to a salvage value of zero. Assume a 34% tax bracket and a discount rate of 11%. What is the NPV of this project? -$444,561.54 -$231,765,90 -$435,321.80 -$341,889.65 -S459,714.72 - Previous Next →
Question 5 1 pts A pharmaceuticals company has accepted a project that is expected to increase revenues by $30,000 a year and cash expenses by $10,000 a year. The project will require the purchase of some new equipment that will increase depreciation expenses by $12,000 a year. Net working capitalis also expected to increase by $3,000 annually. The firm is in the 40% marginal tax bracket. What is the change in operating cash flows? $16,800 0 $13,800 $4,800 $12,200 $11,800
Most questions answered within 3 hours.
-
Based on the range, which of the following sets of scores has
the greatest variability? 3,...
asked 45 minutes ago -
Ripples in a pond travel at a velocity of 3 m/s with one peak
passing a...
asked 35 minutes ago -
A man stands on the roof of a building of height 13.0 mm and
throws a...
asked 41 minutes ago -
The extent to which assets are financed by borrowed funds and
other liabilities is indicated by:...
asked 1 hour ago -
Explain in detail
Germany is the fifth largest economy
explain what goods and services Germany specializes...
asked 1 hour ago -
The density of platinum is 21.45 g/mL. If a cube of platinum
with a mass of...
asked 2 hours ago -
Accounts Receivable
Sales
A/R Posting
Extended Sales Invoice
Packing Slip
Compare invoice to packing slip 2...
asked 2 hours ago -
Michaella, age 23, is a full-time law student and is claimed by
her parents as a...
asked 2 hours ago -
Why are polymers not typically casted into products?
asked 2 hours ago -
When rolling a die 129 times, what is the probability of rolling
a 6 no more...
asked 2 hours ago -
4. A call option currently sells for $7.75. It has a strike
price of $85 and...
asked 2 hours ago -
1.
You need to prepare 10.0 liters of an acid aqueous solution with a
pH of...
asked 2 hours ago