A machine cost $80,000. Depreciation is calculated straight line equal amounts over 4 years. Every year the machine increases cash flows by an amount of $30,000. Taxes, Opportunity Cost have all been accounted for in this number. There is not net working capital. After 3 years when the machine has only been depreciated for 3 years and therefore the book value is not zero, the machine is sold for $30,000. This, therefore is a 3 year project. The rate of discount is 8% and the tax rate id 36%. What is the NPV of installing the machinery?
A machine cost $80,000. Depreciation is calculated straight line equal amounts over 4 years. Every year...
(Straight Line Depreciation) A new machine cost $100,000, and will increase inventory by $10,000, A/R by $15,000, and A/P by $5,000. This machine will reduce our expenses by $18,000 per year. The machine will be depreciated to a zero book value in 10 years, but could be sold for $12,000 at the end of 10 years. The marginal tax rate is 35%, and the cost of capital is 12%. Calculate the payback, NPV, IRR, and PI.
Daily Enterprises is purchasing a $8,000,000 machine. The machine will be depreciated using straight-line depreciation over its 6 year life and will have no salvage value. The machine will generate revenues of $8,000,000 per year along with costs of $3,000,000 per year. If Daily's marginal tax rate is 26%, what will be the cash flow in each of years 1 to 6 (the cash flow will be the same each year)? Enter your answer rounded to the nearest whole number....
Daily Enterprises is purchasing a $11,000,000 machine. The machine will be depreciated using straight-line depreciation over its 6 year life and will have no salvage value. The machine will generate revenues of $7,000,000 per year along with fixed costs of $1,000,000 per year. If Daily's marginal tax rate is 36%, what will be the cash flow in each of years 1 to 6 (the cash flow will be the same each year)? Enter your answer rounded to the nearest whole...
Daily Enterprises is purchasing a $10,000,000 machine. The machine will be depreciated using straight-line depreciation over its 8 year life and will have no Salvage value. The machine wil generate revenues of $7,000,000 per year along with foxed costs of $4,000,000 per year. Daily's marginal tax rate is 35%, what will be the cash flow in each of years 1 to 8 (the cash flow will be the same each year)? Enter your answer founded to the nearest whole number...
. The new equipment will have a cost of $9,000,000, and it will be depreciated on a straight-line basis over a period of six years (years 1-6) The old machine is also being depreciated on a straight-line basis. It has a book value or 200,000 (at year 0) and four more years of depreciation left ($50,000 per year). . The new equipment will have a salvage value of $0 at the end of the project's life (year 6). The old...
Builtrite A is considering replacing a 10 year old machine that originally cost $30,000, has a current book value of $10,000 with five years of expected life left. The machine is being depreciated over its 15 year life down to a terminal value of $0. Currently, this machine has an expected salvage value of $15,000. The replacement machine that Builtrite is considering would cost $80,000 and be depreciated down to $0 over its five year expected life. At the end...
A company is evaluating the purchase of Machine A. The new machine would cost $120,000 and would be depreciated for tax purposes using the straight-line method over an estimated ten-year life to its expected salvage value of $20,000. The new machine would require an addition of $30,000 to working capital. In each year of Machine A’s life, the company would reduce its pre-tax costs by $40,000. The company has a 12% cost of capital and is in the 35% marginal...
A machine purchased three years ago for $300,000 has a current book value using straight-line depreciation of $177,000; its operating expenses are $31,000 per year. A replacement machine would cost $238,000, have a useful life of eleven years, and would require $13,000 per year in operating expenses. It has an expected salvage value of $67,000 after eleven years. The current disposal value of the old machine is $80,000; if it is kept 11 more years, its residual value would be...
Assume Corbins ,Inc purchased an automated machine 5 years ago that had an estimated economic life of 10 years. The Automated Machines originally cost $300,000 and has been fully depreciated, leaving a current book value of $0. The actual market value of this drill press is $80,000. The company is considering replacing the automated machine with a new one costing $380,000. Shipping and installation charges will add an additional $10,000 to the cost. Corbins., Inc also has paid a sunk...
There is a 5-year project that is expected to generate $32 million of cash revenue per year for the first 3 years and then S10 million per year for the next 2 years. The upfront cost to start the project is $90 million, and then it will cost $5 million per year to maintain this project. At the end of the project, the used fixed and working capital, which will be fully depreciated to 0 on the book, can be...