Question: a) What is the CFo (initial outlay) for this project? (without excel) b) What is the terminal cash flow associated with this project? (without excel)

$120,000$37,600CURRENT MACHINEPurchased Two Years AgoPurchase PriceDepreciation using 5-year MACRS (20, 32, 19.2, 11.52, a) What is the CFo (initial outlay) for this project? (without excel)

b) What is the terminal cash flow associated with this project? (without excel)

CURRENT MACHINE Purchased Two Years Ago Purchase Price $120,000 Depreciation using 5-year MACRS (20, 32, 19.2, 11.52, 11.52, 5.76) Salvage Value $37,600 NEW (REPLACEMENT) MACHINE $180,000 $7,500 $15,000 Cost Shipping Facilities Modification Depreciation using 5-year MACRS (20, 32, 19.2, 11.52, 11.52, 5.76) Change in Net Working Capital $10,000 $30,000 $12,000 $8,000 Will increase revenues by Will decrease expenses by Salvage Value at end of six years Company tax rate 34% MARR 10%

Step by Step Solution

★★★★★

3.44 Rating (160 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

1 cost of new machine 180000 shipping cost 7500 facilities ... View full answer

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!

The net cash flow associated with development and sale of a new product is shown. Determine the present worth at an interest rate of 12% per year. The cash flow is in $1000 units. Show (a) Hand (b)...

1. Determine the annual incremental free cash flow associated with each expansion plan relative to the status quo (no expansion). 2. Compute the IRR and payback period of each expansion plan. Which...

A large distributor of oil-well drilling equipment operated over the past two years with EOQ policies based on an annual holding cost rate of 28%. Under the EOQ policy, a particular product has been...

New equipment purchase, income taxes Annas Bakery plans to purchase a new oven for its store. The oven has an estimated useful life of 4 years. The estimated pretax cash flows for the oven are as...

You can use simple estimates to compare the cost and performance of a terabyte storage System made entirely from disks with one that incorporates tertiary storage. Suppose that magnetic disks each...

Foghorn Leghorn is considering the replacement of an old egg-sorting machine used with his Foggy's Farm Fresh Eggs business. The old ,egg machine is not quite running eggs actly the way it was...

You have been asked by the president of your company to evaluate the proposed acquisition of a new spectrometer for the firms R&D department. The equipments basic price is $70,000, and it would cost...

Singleton Supplies Corporation (SSC) manufactures medical products for hospitals, clinics, and nursing homes. SSC may introduce a new type of X-ray scanner designed to identify certain types of...

Troy Industries purchased a new machine 3 years ago for $80,000. It is being depreciated under MACRS with a 5-year recovery period using the percentages given in Table 4.2. Assume a 40% tax rate. a....

For each of the following cases, determine the total taxes resulting from the transaction. Assume a 40% tax rate. The asset was purchased 2 years ago for $200,000 and is being depreciated under MACRS...

A put option is currently selling for $8.30. It has a strike price of $80 and seven months to maturity. The current stock price is $83. The risk-free rate is 5 percent, and the stock has a dividend...

Think of a project manager or leader that you have actually known and or with whom you have worked, Describe the emotional and social intelligence competencies that make him or her successful working...

Attempt 1 : 3 attempts remaining. Let f ( x ) be defined as follows. f ( x ) = x 2 - 9 x 2 - 8 x 1 5 Give the interval ( s ) on which the function is continuous. Use interval notation, or enter DNE...

A company approached you as it is seeking your assistance in order to raise a given level of cash to finance a project that has a useful life of 10 years. They would like to expand their business and...

Q3/ A solid steel bar of circular cross section in fig.3 has diameter d 1.5 in , length L= 54 in , and shear modulus of elasticity G= 11.5x 10 psi , the bar is subjected to torques T acting at the...

Use Figure 1 below to answer questions (2, 3, and 4) 2-The voltage across the capacitor is (1 Point) 22 Vc 2 F () 4 0.5 H Figure 1

Which of the following statements is true? Arteries carry blood away from the heart. The aorta is a large vein. Veins carry blood away from the heart. Arteries carry oxygenated blood.

a) What is the CFo (initial outlay) for this project? (without excel) b) What is the terminal cash flow associated with this project? (without excel) $120,000 $37,600 CURRENT MACHINE Purchased Two...

I have attached my business finance homework and would like someone to work through the problems for me and give the formulas as well. Thank you. 1.) (Calculating operating cash flows) Assume that a...

1. You have been tasked by your manager to evaluate the efficacy of purchasing a special piece of machinery to meet anticipated future demand. The machine will cost $100,000 installed with a...

Problem 1: Compute the cost of capital for the firm for the following: A bond the has a $1.000 par value (face value) and a contract or coupon interest rate of 11%. The bond has a current market...

The Chung Chemical Corporation is considering the purchase of a chemical analysis machine. Although the machine being considered will result in an increase in earnings before interest and taxes of $...

Damon Corporation, a sports equipment manufacturer, has a machine currently in use that was originally purchased 3 years ago for $ 1 2 0 , 0 0 0 . The firm depreciates the machine under MACRS using a...