Information about a project that ABC Company is considering is as follows: Investment $300,000 Revenues $190,000 Variable
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Information about a project that ABC Company is considering is as follows: Investment $300,000 Revenues $190,000 Variable costs $50,000 Fixed out-of-pocket costs $25,000 Weighted average cost of capital 8% Tax rate 40% The property is considered 5-year property for tax purposes. The company plans to dispose of the property at the end of the third year. Salvage value at that time is expected to be $60,000. Assume all cash flows occur at the end of the year. Refer to the following table.
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
20.00% 32.00% 19.20% 11.52%. 11.52 5.76%
Required:
ABC after-tax cash inflow from disposal is____________?
Related Book For
Introduction to Operations Research
ISBN: 978-1259162985
10th edition
Authors: Frederick S. Hillier, Gerald J. Lieberman
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