Homework Answers
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please show all the excel functions (12-14) A construction equipment rental company can purchase a new crane for $1...
use excel and show functions MISIULUIS (12-14) A construction equipment rental company can purchase a new...
use excel and show functions
MISIULUIS (12-14) A construction equipment rental company can purchase a new crane for $1,125,000 which is expected to last for 25 years. The expected salvage value at that time is $147,000. The annual rental income from the crane is $195,000. Using straight-line depreciation and a MARR of 15%, a) What is the present worth of the after-tax cash flow for this equipment? b) Should the company invest in this crane? in 1.9 online olan 2...
assume a 21% tax rate (12-14) A construction equipment rental company can purchase a new crane for $1,125,000 which is e...
assume a 21% tax rate
(12-14) A construction equipment rental company can purchase a new crane for $1,125,000 which is expected to last for 25 years. The expected salvage value at that time is $147,000. The annual rental income from the crane is $195,000. Using straight-line depreciation and a MARR of 15%, a) What is the present worth of the after-tax cash flow for this equipment? b) Should the company invest in this crane?
ABC Company is planning to purchase an equipment. The purchase price of the equipment is $350,000....
ABC Company is planning to purchase an equipment. The purchase price of the equipment is $350,000. The company plans to make a down payment of 25% of the first cost, and for the remainder of the cost of the equipment, they plan to take a loan. The company will pay off this loan in 7 years at 10% in equal annual payments. ABC believes that the equipment can be sold for $75,000 at the end of its 15-year service life....
Company A is considering the purchase of a new piece of equipment which would cost $10,000...
Company A is considering the purchase of a new piece of equipment which would cost $10,000 with a 5 year useful life and have a salvage of $500 at the end of the 5 year period. Marginal tax rate is 30%, avg tax rate 20%. Assume straight line depreciation, the net effect of annual depreciation on the free cash flow is$___ in each of the 5 years.
A construction company is considering acquiring a new earthmover. The purchase price is $110,000, and an...
A construction company is considering acquiring a new earthmover. The purchase price is $110,000, and an additional $25,000 is required to modify the equipment for special use by the company. The equipment falls into the MACRS seven-year classification (the tax life), and it will be sold after five years (the project life) for $50,000 The purchase of the earthmover will have no effect on revenues, but the machine is expected to save the firm $68,000 per year in before-tax operating...
Southport Company is considering the purchase of a piece of equipment that costs $100,000. The equipment...
Southport Company is considering the purchase of a piece of equipment that costs $100,000. The equipment would be depreciated on a straight-line basis to its expected salvage value of $10,000 over its 10-year useful life. Assuming a tax rate of 40%, what is the annual amount of the depreciation tax shield provided by this investment? Multiple Choice $4,000 $9,000 $3,600 None of these answers is correct.
A construction company is considering to acquire a new equipment.Table 1 is the information of two...
A construction company is considering to acquire a new
equipment.Table 1 is the information of two alternatives for this
new equipment. Complete the following questions according to the PW
analysis The after tax market minimum attractive acquire
(1) which alternative should the company acquire?
(2)if the inflation rate is 2% per year and the base year is
year 0,whic company should you choose?
PW
is Present Value
use Present Value method to analyze
Table 1 Capital investment А 9000 в...
a. A new operating system for an existing machine is expected to cost $667,000 and have...
a. A new operating system for an existing machine is expected to cost $667,000 and have a useful life of six years. The system yields an incremental after-tax income of $195,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $55,000. b. A machine costs $470,000, has a $38,000 salvage value, is expected to last eight years, and will generate an after-tax income of $105,000 per year after straight-line depreciation. Assume the company requires...
1. A construction company is considering procuring one of two types of heavy construction equipment (A...
1. A construction company is considering procuring one of two types of heavy construction equipment (A and B). Each type of equipment is expected to have a 5-year useful life with zero salvage value. Equipment A can be purchased at a cost of $30,000, while Equipment B would cost $55,000. The net cash flows for each type of equipment is presented below. (60) В Year -$30.000 $6,000 $6,000 $12,000 $55,000 $24,000 $10,000 $21,000 -$7,000 $26,610 1 2 3 $6,000 $25,564...
Enable Company is considering the purchase of production equipment that costs $1100000. The equipment is expected...
Enable Company is considering the purchase of production equipment that costs $1100000. The equipment is expected to generate an annual cash flow of $400000 and have a useful life of 5 years with no salvage value. The firm's cost of capital is 13 percent. The straight-line method with no mid-year convention is used. 40 Ignoring income taxes, the net present value of the project is A ($255,700) B $308,000 C $255,700 D $900,000
use excel and show functions
MISIULUIS (12-14) A construction equipment rental company can purchase a new crane for $1,125,000 which is expected to last for 25 years. The expected salvage value at that time is $147,000. The annual rental income from the crane is $195,000. Using straight-line depreciation and a MARR of 15%, a) What is the present worth of the after-tax cash flow for this equipment? b) Should the company invest in this crane? in 1.9 online olan 2...
assume a 21% tax rate
(12-14) A construction equipment rental company can purchase a new crane for $1,125,000 which is expected to last for 25 years. The expected salvage value at that time is $147,000. The annual rental income from the crane is $195,000. Using straight-line depreciation and a MARR of 15%, a) What is the present worth of the after-tax cash flow for this equipment? b) Should the company invest in this crane?
A construction company is considering acquiring a new earthmover. The purchase price is $110,000, and an additional $25,000 is required to modify the equipment for special use by the company. The equipment falls into the MACRS seven-year classification (the tax life), and it will be sold after five years (the project life) for $50,000 The purchase of the earthmover will have no effect on revenues, but the machine is expected to save the firm $68,000 per year in before-tax operating...
A construction company is considering to acquire a new
equipment.Table 1 is the information of two alternatives for this
new equipment. Complete the following questions according to the PW
analysis The after tax market minimum attractive acquire
(1) which alternative should the company acquire?
(2)if the inflation rate is 2% per year and the base year is
year 0,whic company should you choose?
PW
is Present Value
use Present Value method to analyze
Table 1 Capital investment А 9000 в...
a. A new operating system for an existing machine is expected to cost $667,000 and have a useful life of six years. The system yields an incremental after-tax income of $195,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $55,000. b. A machine costs $470,000, has a $38,000 salvage value, is expected to last eight years, and will generate an after-tax income of $105,000 per year after straight-line depreciation. Assume the company requires...
1. A construction company is considering procuring one of two types of heavy construction equipment (A and B). Each type of equipment is expected to have a 5-year useful life with zero salvage value. Equipment A can be purchased at a cost of $30,000, while Equipment B would cost $55,000. The net cash flows for each type of equipment is presented below. (60) В Year -$30.000 $6,000 $6,000 $12,000 $55,000 $24,000 $10,000 $21,000 -$7,000 $26,610 1 2 3 $6,000 $25,564...
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