Homework Answers
Answer:
Given that:
Statement showing depreciation
Statement showing
NPV
a) Net profit for first year = 18004$
b) Annual cash flow for 5 years
c) ATCF
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.ATCF Analysis: (15 ptos) ACME Inc. is contemplating the purchase of a new caterpillar machine. The machine will co...
.ATCF Analysis: (15 ptos) ACME Inc. is contemplating the purchase of a new caterpillar machine. The machine will co...
.ATCF Analysis: (15 ptos) ACME Inc. is contemplating the purchase of a new caterpillar machine. The machine will cost $180,000. Its market value at the end of five years is estimated as $40,000. The accounting department uses the MACRS GDS-3 years recovery period depreciate the equipment. The justification for this machine include $60,000 savings per year in labor and $30,000 savings per year in reduced material. Equipment life 5 years, Tax rate 40% MARR is 10%. Use this information to...
6) (28 points) A company is considering a replacement for an aging machine that has been...
6) (28 points) A company is considering a replacement for an aging machine that has been fully depreciated for tax purposes. The new machine will have an initial cost of $400,000 and is expected to generate an income of $125,000 per year. Its estimated salvage value at the end of its useful life of 4 years will be $60,000. The new machine is a MACRS-GDS 3-year property for calculating depreciation deductions. The effective tax rate is 35%. a) (20 points)...
1. An injection mokding machine can be purchased and installed for $80,000 It is in the...
1. An injection mokding machine can be purchased and installed for $80,000 It is in the seven-year GDS property class and is expected to be kept in servioe for eight years. It is believed that $12,000 can be obtained when the machine is disposed of at the end of year eight. The net annual value added (i.e, revenues less expenses) that can be attributed to this machine is constant over eight years and amounts to $15,000, An effective income tax...
The PARC Co. Inc. asked you to determine some of the after-tax cash flows (ATCF) for...
The PARC Co. Inc. asked you to determine some of the after-tax cash flows (ATCF) for equipment used for research and development that is being considered. PARC expects the equipment to require the purchase of $190,000 worth of capital equipment (first cost) and to operate for five years. The capital equipment will have a resale value of $55,000 at the end of the 5th year. PARC plans to use the sum-of-years’-digits depreciation method for income tax calculations. The income tax...
The PARC Co. Inc. asked you to determine some of the after-tax cash flows (ATCF) for...
The PARC Co. Inc. asked you to determine some of the after-tax cash flows (ATCF) for equipment used for research and development that is being considered. PARC expects the equipment to require the purchase of $190,000 worth of capital equipment (first cost) and to operate for five years. The capital equipment will have a resale value of $55,000 at the end of the 5th year. PARC plans to use the sum-of-years’-digits depreciation method for income tax calculations. The income tax...
7) (35 points) EmKay, Inc. is considering the purchase of new automated equipment to increase its...
7) (35 points) EmKay, Inc. is considering the purchase of new automated equipment to increase its production capacity. For this purchase, the following data apply: Purchase price = $450,000 ($250,000 from own funds (equity) and $200,000 from a loan) Equipment Life: 4 years Depreciation: MACRS-GDS 3-year property Estimated salvage: $90,000 Effective tax rate: 35% EOY Expected O&M Costs Estimated revenue $30,000 $180,000 2 $40,000 $200,000 3 $50,000 $220,000 4 $60,000 $240,000 Conditions on loan: $200,000 borrowed at a nominal rate...
Needs to be in EXCEL A new engineer who just was hired by Machine Excellence is...
Needs to be in EXCEL A new engineer who just was hired by Machine Excellence is pushing for a brand new laser machining center. He insists that it is a money maker from the first day. He did not figure the deprecation and the after taxes cash flow (CFAT). Give this rookie engineer a little intelligent guidance here on the CFAT for a ROR analysis of the new laser equipment. Here are the figures for the production machining equipment for...
Case Study Description A $6M investment is considered by an electric bike manufacturing company to add a new productio...
Case Study Description A $6M investment is considered by an electric bike manufacturing company to add a new production line for its new product, electric skateboards. The company has commissioned an exploratory study of where to place the new production line and which type of equipment to use. There are three types of machines to choose from for the company to install on the new assembly line. The machines have zero salvage value at the end of 10-year planning horizon....
Mars Inc. is considering the purchase of a new machine that costs $60,000. This machine will...
Mars Inc. is considering the purchase of a new machine that costs $60,000. This machine will reduce manufacturing costs by $5,000 annually. Mars will use the MACRS accelerated method (shown below) to depreciate the machine, and it expects to sell the machine at the end of its 5-year life for $10,000. The firm expects to be able to reduce net operating working capital by $15,000 when the machine is installed, but the net working capital will return to the original...
The answer is already given, I just don't understand how. Can you please show how each...
The answer is already given, I just don't understand how. Can
you please show how each value is caculated and label please!
2. Depreciation, taxes and source of finance. Compute the present value of a project with the following characteristics: Initial investment required 1 million dollars, 40% of it will be financed with a loan at 10% interest rate payable yearly in five years. Yearly savings for the first year of the project is $300,000, increasing by 50,000 year after...
.ATCF Analysis: (15 ptos) ACME Inc. is contemplating the purchase of a new caterpillar machine. The machine will cost $180,000. Its market value at the end of five years is estimated as $40,000. The accounting department uses the MACRS GDS-3 years recovery period depreciate the equipment. The justification for this machine include $60,000 savings per year in labor and $30,000 savings per year in reduced material. Equipment life 5 years, Tax rate 40% MARR is 10%. Use this information to...
6) (28 points) A company is considering a replacement for an aging machine that has been fully depreciated for tax purposes. The new machine will have an initial cost of $400,000 and is expected to generate an income of $125,000 per year. Its estimated salvage value at the end of its useful life of 4 years will be $60,000. The new machine is a MACRS-GDS 3-year property for calculating depreciation deductions. The effective tax rate is 35%. a) (20 points)...
1. An injection mokding machine can be purchased and installed for $80,000 It is in the seven-year GDS property class and is expected to be kept in servioe for eight years. It is believed that $12,000 can be obtained when the machine is disposed of at the end of year eight. The net annual value added (i.e, revenues less expenses) that can be attributed to this machine is constant over eight years and amounts to $15,000, An effective income tax...
7) (35 points) EmKay, Inc. is considering the purchase of new automated equipment to increase its production capacity. For this purchase, the following data apply: Purchase price = $450,000 ($250,000 from own funds (equity) and $200,000 from a loan) Equipment Life: 4 years Depreciation: MACRS-GDS 3-year property Estimated salvage: $90,000 Effective tax rate: 35% EOY Expected O&M Costs Estimated revenue $30,000 $180,000 2 $40,000 $200,000 3 $50,000 $220,000 4 $60,000 $240,000 Conditions on loan: $200,000 borrowed at a nominal rate...
The answer is already given, I just don't understand how. Can
you please show how each value is caculated and label please!
2. Depreciation, taxes and source of finance. Compute the present value of a project with the following characteristics: Initial investment required 1 million dollars, 40% of it will be financed with a loan at 10% interest rate payable yearly in five years. Yearly savings for the first year of the project is $300,000, increasing by 50,000 year after...
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