Homework Answers
| Time line | 0 | 1 | 2 | 3 | 4 | |||
| Cost of new machine | -420000 | |||||||
| =A. Initial Investment outlay | -420000 | |||||||
| 3 years MACR rate | 33.00% | 45.00% | 15.00% | 7.00% | 0.00% | |||
| Profits | 120000 | 120000 | 120000 | 120000 | ||||
| -Depreciation | =Cost of machine*MACR% | -138600 | -189000 | -63000 | -29400 | 0 | =Salvage Value | |
| =Pretax cash flows | -18600 | -69000 | 57000 | 90600 | ||||
| -taxes | =(Pretax cash flows)*(1-tax) | -14694 | -54510 | 45030 | 71574 | |||
| +Depreciation | 138600 | 189000 | 63000 | 29400 | ||||
| =B. after tax operating cash flow | 123906 | 134490 | 108030 | 100974 | ||||
| +Proceeds from sale of equipment after tax | =selling price* ( 1 -tax rate) | 23700 | ||||||
| +Tax shield on salvage book value | =Salvage value * tax rate | 0 | ||||||
| =C. Terminal year after tax cash flows | 23700.00 | |||||||
| Total Cash flow for the period | -420000 | 123906 | 134490 | 108030 | 124674 | |||
| Discount factor= | (1+discount rate)^corresponding period | 1 | 1.06 | 1.1236 | 1.191016 | 1.26247696 | ||
| Discounted CF= | Cashflow/discount factor | -420000 | 116892.4528 | 119695.6212 | 90704.07115 | 98753.48537 | ||
| D. NPV= | Sum of discounted CF= | 6045.63 | ||||||
Accept project as NPV is positive
Add Answer to:
A)
B)
C)
D)
The TropicalFlowers Company is evaluating an asset that may increase sales by...
1. Assume that you are analyzing a proposed asset acquisition where the assets will cost $5...
1. Assume that you are analyzing a proposed asset acquisition where the assets will cost $5 million, plus $200,000 to have them delivered and installed. The project will result in sales of 6000 units in the first year of operations. The sales price will be $190 per unit and the operating costs (excluding depreciation) will be $140 per unit. The assets will be depreciated using the MACRS 5-year rates. The project will require a level of net working capital of...
Your company is considering expanding operations and buying a new machine to handle the increased volume....
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...
Problem 11-07 New-Project Analysis The president of the company you work for has asked you to...
Problem 11-07 New-Project Analysis The president of the company you work for has asked you to evaluate the proposed acquisition of a new chromatograph for the firm’s R&D department. The equipment's basic price is $150,000, and it would cost another $22,500 to modify it for special use by your firm. The chromatograph, which falls into the MACRS 3-year class, would be sold after 3 years for $52,500. The MACRS rates for the first 3 years are 0.3333, 0.4445 and 0.1481....
with work please The president of Real Time Inc. has asked you to evaluate the proposed...
with work please
The president of Real Time Inc. has asked you to evaluate the proposed acquisition of a new computer. The computer's price is $50,000, and it falls into the MACRS 3-year class. Purchase of the computer would require an increase in spare parts inventory of $3,000. Accounts payable will also increase by $2,000 The computer would increase the firm's before-tax revenues by $20,000 per year but would also increase operating costs by $5,000 per year. Annual interest expense...
Cash flows estimation and capital budgeting: You are the head of finance department in XYZ Company....
Cash flows estimation and capital budgeting: You are the head of finance department in XYZ Company. You are considering adding a new machine to your production facility. The new machine’s base price is $10,000.00, and it would cost another $2,280.00 to install it. The machine falls into the MACRS 3-year class (the applicable MACRS depreciation rates are 33.33%, 44.45%, 14.81%, and 7.41%), and it would be sold after three years for $1,850.00. The machine would require an increase in net...
please give a written answer, please do not use excel as it has to be written...
please give a written answer, please do not use excel as it has
to be written out. thank you.
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...
You must evaluate the purchase of a proposed spectrometer for the R&D department. The base price...
You must evaluate the purchase of a proposed spectrometer for the R&D department. The base price is $280,000, and it would cost another $42,000 to modify the equipment for special use by the firm. The equipment falls into the MACRS 3-year class and would be sold after 3 years for $140,000. The applicable depreciation rates are 33%, 45%, 15%, and 7%. The equipment would require an $5,000 increase in net operating working capital (spare parts inventory). The project would have...
The president of the company you work for has asked you to evaluate the proposed acquisition...
The president of the company you work for has asked you to evaluate the proposed acquisition of a new chromatograph for the firm's R&D department. The equipment's basic price is $150,000, and it would cost another $22,500 to modify it for special use by your firm. The chromatograph, which falls into the MACRS 3-year dass, would be sold after 3 years for $37,500. The MACRS rates for the first 3 years are 0.3333, O.4445 and 0.1481. use of the equinet...
The president of the company you work for has asked you to evaluate the proposed acquisition...
The president of the company you work for has asked you to evaluate the proposed acquisition of a new chromatograph for the firm's R&D department. The equipment's basic price is $77,000, and it would cost another $18,000 to modify it for special use by your firm. The chromatograph, which falls into the MACRS 3-year class, would be sold after 3 years for $32,100. The MACRS rates for the first 3 years are 0.3333, 0.4445 and 0.1481. Use of the equipment...
he president of the company you work for has asked you to evaluate the proposed acquisition...
he president of the company you work for has asked you to evaluate the proposed acquisition of a new chromatograph for the firm’s R&D department. The equipment's basic price is $80,000, and it would cost another $20,000 to modify it for special use by your firm. The chromatograph, which falls into the MACRS 3-year class, would be sold after 3 years for $37,000. The MACRS rates for the first 3 years are 0.3333, 0.4445 and 0.1481. Use of the equipment...
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...
with work please
The president of Real Time Inc. has asked you to evaluate the proposed acquisition of a new computer. The computer's price is $50,000, and it falls into the MACRS 3-year class. Purchase of the computer would require an increase in spare parts inventory of $3,000. Accounts payable will also increase by $2,000 The computer would increase the firm's before-tax revenues by $20,000 per year but would also increase operating costs by $5,000 per year. Annual interest expense...
please give a written answer, please do not use excel as it has
to be written out. thank you.
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...
The president of the company you work for has asked you to evaluate the proposed acquisition of a new chromatograph for the firm's R&D department. The equipment's basic price is $150,000, and it would cost another $22,500 to modify it for special use by your firm. The chromatograph, which falls into the MACRS 3-year dass, would be sold after 3 years for $37,500. The MACRS rates for the first 3 years are 0.3333, O.4445 and 0.1481. use of the equinet...
The president of the company you work for has asked you to evaluate the proposed acquisition of a new chromatograph for the firm's R&D department. The equipment's basic price is $77,000, and it would cost another $18,000 to modify it for special use by your firm. The chromatograph, which falls into the MACRS 3-year class, would be sold after 3 years for $32,100. The MACRS rates for the first 3 years are 0.3333, 0.4445 and 0.1481. Use of the equipment...
Most questions answered within 3 hours.
-
Verify the MIRR is 9.29% given cash flows in years 1 and 2 of
$1,000 each,...
asked 23 minutes ago -
Calculate the pH of a 5.7 M solution of aniline (C6H5NH2; Kb =
3.8 x 10^-10)
asked 2 hours ago -
LSL R3, R3, R12
Memory
Address
Orig.
Data
Updated
Data
Register
Orig.
Data
Updated
Data
0x84F0...
asked 2 hours ago -
Air at 100 kPa and density of 1.2 kg/m3 flows upward through a
5-cm diameter inclined...
asked 2 hours ago -
Define the following concepts in your own words: (a) stiffness,
(b) strength, (c) strain,
(d) ductility,...
asked 3 hours ago -
In C++
In this homework, you will be tasked with creating functions to
manipulate strings that...
asked 3 hours ago -
An isolated colony represents a pure culture. one rare occasions
, however , a colony can...
asked 4 hours ago -
*****DO NOT ANSWER THIS QUESTION IF YOU DON'T
KNOW*******Rights and Duties of Auditors; Minimum 4000
words...
asked 5 hours ago -
The probability that Janie is wearing sunglasses is 1/4. The
probability that she is wearing sunglasses...
asked 5 hours ago -
Do you believe social media is more of a help or a hindrance in
controlling crises...
asked 5 hours ago -
Two long, parallel wires separated by 2.85 cm carry currents in
opposite directions. The current in...
asked 5 hours ago -
Question # 1. Develop a list of rehabilitation journals
that publish articles concerning career counseling for...
asked 5 hours ago