Finance Problems

1) What is the initial outlay, given the following information:

• Equipment Price.   $375,000

• Installation. 10,000

• Power Survey 30,000

• Shipping. 8,000

• Working Capital   100,000

• Project Marketing Report 15,000

2) What is the net equipment cost, given the following, when a new piece of equipment replaces an old one:

• Old equipment sells for $125,000

• Book value of old equipment 22,000

• TaxRate 40%

• New equipment cost 800,000

• Site survey 18,000

• Installation cost   20,000

3) Equipment is sold for $30,000 at the end of a project. The working capital return is $50,000. The tax rate is 40%. What is the terminal cash flow?

4) A piece of equipment was sold at the end of a project. The project received $85,000 for the equipment that carried a book value of $75,000. The tax rate is 35%. What is the salvage value?

Answer rating: 100% (QA)

1 To calculate the initial outlay we sum up all the costs Initial Outlay Equipment Price Installatio... View the full answer