The Free Cash Flow for the Year 0
The Free Cash Flow for the Year 0 = Cost of the Machine + Transportation & Installation Charges
= -$10,500,000 - $55,000
= -$10,555,000 (Year 0 cash flow would be normally an outflow and therefore, it would be negative)
Incremental free cash flows associated with the new machine for Year 1 to 5
Incremental free cash flows = [(Annual Sales - Costs) x (1 – Tax Rate)] + [Depreciation x Tax Rate]
= [($44,00,000 - $11,00,000) x (1 – 0.35)] + [($10,555,000 / 5 Years) x 0.35]
= [$33,00,000 x 0.65] + [$21,11,000 x 0.35]
= $2,145,000 + $738,850
= $2,883,850 per year
Daily Enterprises is purchasing a $10.5 million machine. It will cost $55,000 to transport and install...
Daily Enterprises is purchasing a $10.4 million machine. It will cost $54,000 to transport and install the machine. The machine has a depreciable life of five years using straight-line depreciation and will have no salvage value. The machine will generate incremental revenues of $4.4 million per year along with incremental costs of $1.1 million per year. Daily's marginal tax rate is 35%. You are forecasting incremental free cash flows for Daily Enterprises. What are the incremental free cash flows associated...
Daily Enterprises is purchasing a $10.1 million machine. It will cost $52000 to transport and install the machine. The machine has a depreciable life of five years using straight-line depreciation and will have no salvage value. The machine will generate incremental revenues of $ 4.3 million per year along with incremental costs of $ 1.1 million per year. Daily's marginal tax rate is 35 %. You are forecasting incremental free cash flows for Daily Enterprises. What are the incremental free...
Daily Enterprises is purchasing a $9.6 million machine. It will cost $45,000 to transport and install the machine. The machine has a depreciable life of five years using straight-line depreciation and will have no salvage value. The machine will generate incremental revenues of $3.9 million per year along with incremental costs of $1.1 million per year. Daily's marginal tax rate is 35%. You are forecasting incremental free cash flows for Daily Enterprises. What are the incremental free cash flows associated...
Daily Enterprises is purchasing a $ 9.7$9.7 million machine. It will cost $ 55 comma 000$55,000 to transport and install the machine. The machine has a depreciable life of five years using straight-line depreciation and will have no salvage value. The machine will generate incremental revenues of $ 4.1$4.1 million per year along with incremental costs of $ 1.2$1.2 million per year. Daily's marginal tax rate is 35 %35%. You are forecasting incremental free cash flows for Daily Enterprises. What...
Daly Enterprises is purchasing a $9.8 million machine. It will cost $52,000 to transport and install the machine. The machine has a depreciable life of five years using straight-line depreciation and will have no salvage value. The machine will generate incremental revenues of $4.4 million per year along with incremental costs of $1.3 million per year. Daily's marginal tax rate is 35%. You are forecasting incremental free cash flows for Daily Enterprises. What are the incremental free cash flows associated...
Daily Enterprises is purchasing a $ 9.7$9.7 million machine. It will cost $ 55 comma 000$55,000 to transport and install the machine. The machine has a depreciable life of five years and will have no salvage value. The machine will generate incremental revenues of $ 3.9$3.9 million per year along with incremental costs of $ 1.4$1.4 million per year. If Daily's marginal tax rate is 35 %35%, what are the incremental earnings (net income) associated with the new machine? Homework:...
Daily Enterprises is purchasing a $9.7 million machine. It will cost $45,000 to transport and install the machine. The machine has a depreciable life of five years and will have no salvage value. The machine will generate incremental revenues of $4.3 million per year along with incremental costs of $1.4 million per year. If Daily's marginal tax rate is 35 %, what are the incremental earnings (net income) associated with the new machine?
Daily Enterprises is purchasing a $ 10.3 million machine. It will cost $ 45 comma 000 to transport and install the machine. The machine has a depreciable life of five years using straight-line depreciation and will have no salvage value. The machine will generate incremental revenues of $ 4.3 million per year along with incremental costs of $ 1.3 million per year. Daily's marginal tax rate is 35 %. You are forecasting incremental free cash flows for Daily Enterprises. What...
Daily Enterprises is purchasing a $10.2 million machine. It will cost $45,000 to transport and install the machine. The machine has a depreciable life of five years and will have no salvage value. The machine will generate incremental revenues of $3.8 million per year along with incremental costs of $1.3 million per year. If Daily's marginal tax rate is 35%, what are the incremental earnings (net income) associated with the new machine? The annual incremental earnings are $ . (Round...
Daily Enterprises is purchasing a $9.9 million machine. It will cost $52,000 to transport and install the machine. The machine has a depreciable life of five years and will have no salvage value. The machine will generate incremental revenues of $3.9 million per year along with incremental costs of $1.4 million per year. If Daily's marginal tax rate is 35%, what are the incremental earnings (net income) associated with the new machine? The annual incremental earnings are. (Round to the...