Question: A firm is looking at replacing a machine. The new machine will cost $479074 and in 5 years time the machine could be sold for

A firm is looking at replacing a machine. The new machine will cost $479074 and in 5 years time the machine could be sold for $178654. The allowable depreciation rate is 15.2% on a straight line basis. The company tax rate is 30%. What is the terminal cash flow assuming the project is evaluated over a 5 year investment horizon?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Pet Transport Company makes two pet carriers, the Cat-allac and the Dog-eriffic. They are both made of plastic with metal doors, but the Cat-allac is smaller. Information for the two products for the...

1 A project is expected to last for 4 years and has annual net cash inflows of $15230 per annum. The project's initial investment is $43974 and the firm's weighted average cost of capital 10.7 per...

A firm is looking at replacing a machine. The new machine will cost $751411 and in 5 years time the machine could be sold for $188077. The allowable depreciation rate is 12.1 % on a straight line...

A firm is looking at replacing a machine. The new machine will cost $774425 and in 5 years time the machine could be sold for $162713. The allowable depreciation rate is 10.6% on a straight line...

A firm is looking at replacing a machine. The new machine will cost $685435 and in 5 years time the machine could be sold for $190109. The allowable depreciation rate is 13% on a straight line basis....

A firm is looking at replacing a machine. The new machine will cost $751516 and in 5 years time the machine could be sold for $162982. The allowable depreciation rate is 13.7% on a straight line...

A firm is looking at replacing a machine. The new machine will cost $617264 and in 5 years time the machine could be sold for $159141. The allowable depreciation rate is 12.2% on a straight line...

A firm is looking at replacing a machine. The new machine will cost $524048 and in 5 years time the machine could be sold for $100191. The allowable depreciation rate is 13.5% on a straight line...

1. If the net present value of a project is positive (nonzero), then the project's: A. PI will be less than 1. B. internal rate of return will exceed its required rate of return. C. costs exceed its...

Percentage by recovery year* 5 years 1 20% 2 32% 3 19% 4 12% 5 12% 6 5% Terminal cash flow-Replacement decision Russell Industries is considering replacing a fully depreciated machine that has a...

please show how to calculate Relevant cash flows No terminal value Central Laundry and Cleaners is considering replacing an existing piece of machinery with a more sophisticated machine. The old...

Please make according to Australian laws and give references of Australian cases (1000 words) You work as a solicitor in a law firm called Super Lawyers. A Senior Partner of the firm, Alex Lee, has...

You are an employee of a company called Choices (Pty) Ltd and since the financial manager knows that you have just passed the financial management module for your qualification, he approached you to...

Incriw Destbeyd Homepere Cecemino Cempu Darkeord O 4 Alhend Renidy - Question 4 of 1 0 View Policies Current Attempt in Progress The following list of statements about corporations are given below. A...

Draw a class diagram and its relationship based on the following statements. You can use any UML tool/software to represent your class diagram. Do NOT copy and paste your diagram, use the attachment...