Cash Flow For Year 2 | |||
Revenue | 40000 | ||
Less: | |||
Depreciation | 45000 | ||
Loss | -5000 | ||
Add: Tax Saving | 1700 | ||
(5000*0.34) | |||
Net Income | -3300 | ||
Add: Depreciation | 45000 | ||
(100000*45%) | |||
Operating Cash Flow | 41700 | ||
Therefore last option is correct | |||
Afirm is considering the acquisition of a new machine. The base price is $85.000 and it...
A firm is considering the acquisition of a new machine. The base price Is $85,000 and it would cost $15,000 to install. The machine is MACRS 3 year class property and it will be sold after 3 years for $17,000. The machine would also require an increase in net working capital of $10,000. The machine is expected to increase before tax revenues by $40,000 per year. This firm is in a 34 % marginal tax bracket. MACRS 3 year factors...
A firm is considering the acquisition of a new machine. The base price is $85,000 and it would cost $15,000 to install. The machine is MACRS 3 year class property and it will be sold after 3 years for $17,000. The machine would also require an increase in net working capital of $10,000. The machine is expected to increase before tax revenues by $40,000 per year. This firm is in a 34% marginal tax bracket. MACRS 3 year factors are...
Excelsior Company is evaluating the proposed acquisition of a new production machine. The base price is $260,000, and installation costs would amount to $28,000. An additional $10,0 working capital would be required at installation. The machine has a class life of 3 years. The would save the firm $110,000 per year in operating costs. The firm is planning to keep the n place for 5 years. At the end of the fifth year, the firm plans to sell the machine...
A company is evaluating the acquisition of a new piece of equipment. The base price of the equipment is $100,000 and it will cost an additional $10,000 for shipping and installation. The company also paid a firm $5,000 to determine the feasibility of the new piece of equipment. The equipment falls in the MACRS 3 year class and would be sold after 4 years for $18,000. The new equipment would require an increase in inventory of $4,000, which will be...
Kylie Cosmetics is evaluating the proposed acquisition of a new production machine. The machine's base price is $270,000, and installation costs would amount to $38,000. An additional $15,000 in net working capital would be required at installation. The machine has a class life of 4 years based on straight line depreciation. The machine would save the firm $120,000 per year in operating costs. The firm is planning to keep the machine in place for 5 years. At the end of...
You must evaluate a proposal to buy a new milling machine. The base price is $108,000, and shipping and installation costs would add another $12,500. The machine falls into the MACRS 3-year class, and it would be sold after 3 years for $65,000. The applicable depreciation rates are 33%, 45%, 15%, and 7%. The machine would require a $5,500 increase in net operating working capital increased inventory less increased accounts payable). There would be no effect on revenues, but pretax...
you must evaluate a proposal to buy a new milling machine. the base price is 108,000, and shipping and installation costs would add another 12,500. the machine falls into the MACRS 3 year class, and it would be sold after 3 years for 65,000. The applicable depreciation rates are 33%, 45%, 15%, 7%. the machine would require a 5,500 increase in net operating working capital. there would be no effect on revenues, but pretax labor costs would decline by 44,000...
Your company is considering expanding operations and buying a new machine to handle the increased volume. The machine's basic price is $100,000, and it will cost another $15,000 to modify it for special use by your firm. The machine falls into the MACRS three-year class, and it will be sold after three years for $15,000. Use of the machine will require an increase in net working capital (inventory) of $3,000. The machine will increase revenues by $50,000 per year, and...
You must evaluate a proposal to buy a new milling machine. The base price is $108,000, and shipping and installation costs would add another $12,500. The machine falls into the MACRS 3-year class, and it would be sold after 3 years for $65,000. The applicable depreciation rates are 33%, 45%, 15%, and 7%. The machine would require a $5,500 increase in net operating working capital (increased inventory less increased accounts payable). There would be no effect on revenues, but pretax...
You must evaluate a proposal to buy a new milling machine. The base price is $108,000, and shipping and installation costs would add another $12,500. The machine falls into the MACRS 3-year class, and it would be sold after 3 years for $65,000. The applicable depreciation rates are 33%, 45%, 15%, and 7%. The machine would require a 9,500 increase in net operating working capital (increased inventory less increased accounts payable). There would be no effect on revenues, but pretax...