You are considering the purchase of a machine with an initial outlay of $45,000 with a 5-year

Fantastic news! We've Found the answer you've been seeking!

Question:

You are considering the purchase of a machine with an initial outlay of $45,000 with a 5-year life. It is expected to generate sales of $58,000, operating costs excluding depreciation of $41,000, and interest expense of $3,000.

What is the annual operating cash flow (year 1-5) if the tax rate is 40%? Firm uses straight-line depreciation method.

Related Book For answer-question

Fundamentals of Financial Management

ISBN: 978-0324597707

12th edition

Authors: Eugene F. Brigham, Joel F. Houston

See More Books

Posted Date: Nov 10, 2023 05:42 AM

See More Questions

You are considering the purchase of a small business, Revive Consulting Limited. This company currently earns after-tax cash flow of $350,000 per year. On the basis of a review of similar risk...
Study the information given below and answer the following questions: (25 Marks) 1.1 Calculate the Payback Period of both machines (answers expressed in years, months and days). (5 marks) 1.2 Which...
Ms. Zheng Yiu has the following sources of income in the current year: Net Employment Income 112,345 3,500 Non-eligible dividend (actual amount) Taxable Capital Gains 2,500 Other foreign investment...
The lower-of-cost-or-net realizable value rule for inventory is an example of the application of: (a) the conservatism convention. (b) the historical cost principle. (c) the materiality concept. (d)...
Rank the following three stocks by their level of total risk, highest to lowest. Rail Haul has an average return of 12 percent and standard deviation of 25 percent. The average return and standard...
A spy camera is said to be able to read the numbers on a car's license plate. If the numbers on the plate are 5.5 cm apart, and the spy satellite is at an altitude of 180 km, what must be the...
A distillation column with $8.01 \mathrm{~m}$ of packing operating at total reflux separates methanol from ethanol at $101.3 \mathrm{kPa}$. Average relative volatility is 1.69 . Methanol mole...
Horowitz Company is planning to produce 2,000 units of product in 2012. Each unit requires 3 pounds of materials at $6 per pound and a half-hour of labor at $14 per hour. The overhead rate is 70% of...
MVIDIA Corp. financial statements are presented below. Analysts forecast that its 2020 sales will be $8,260. The expected 2020 tax rate will be 17.35%. Assume the firm pays 5% interest on short- term...
In determining automobile mileage ratings, it was found that the mpg in the city for a certain model is normally distributed, with a mean of 24 mpg and a standard deviation of 1.0 mpg. Suppose that...
10. Give the slope, y-intercept, and equation of each line shown. Slope y-intercept. Equation Slope y-intercept Equation 11. Two points on a line are (-4,-1) and (2,-4). Find the equation of the line...
List to the Freakonomics Podcast entitled "How to Make a Smart TV Ad" and watch the television ad. After watching the ads and listening to the podcast answer the following questions. You can find the...
The activity (r) is a function of the fraction composition (x) for a binary mixture. Estimate the parameters (A and B) using the following activity model and experimental data In (r) (1-x) [A + 2(B -...
9 A stone is thrown upward from the top of a tower, with an initial velocity of 98. Assuming that the height of the tower is 215.6, the acceleration of gravity is 9.8, and the air resistance is...
JIT provides a powerful strategy for improving operations. Discuss how JIT contributes to the competitive advantage of an organization. Focus on JIT techniques which are its suppliers, layout,...
(2) Suppose you have two algorithms, blarg and wibble, with time complexity (n log n) and (n) respectively. blarg modifies the input, while wibble just checks something about the input and returns...
Disk A is connected to Disk C by a belt. In the figure, is 18 cm and r is 144 cm. The angular velocity of Disk C increases from rest at a rate of 16 rad/s per second. If the belt does not slip, what...
Describe the general ways that the revised Form 990, applicable for tax year 2008 and beyond, is different from previous versions.
Donna Jamison, a 2003 graduate of the University of Florida with 4 years of banking experience, was recently brought in as assistant to the chairperson of the board of DLeon Inc., a small food...
A stock is expected to pay a dividend of $0.50 at the end of the year (that is, D1 0.50), and it should continue to grow at a constant rate of 7% a year. If its required return is 12%, what is the...
Refer to Problem 11-1. What is the projects discounted payback? In problem Project K costs $52,125, its expected net cash inflows are $12,000 per year for 8 years, and its WACC is 12%. What is the...
There is a function in the KnoxOR`Graphs` package called This command returns a list of all children of vertices in the given list of parents, where adjmatrix is the adjacency matrix of a directed...
Decide whether the following graph is (a) connected or (b) quasi-connected. ex12 = {{0, 1, 1, 0, 0}, {0, 0, 1, 1, 0}, {1, 0, 0, 0, 0}, (0, 0, 0, 0, 1}, {0, 1, 1, 1, 0}}; DisplayGraph[ex12, GraphType...
Prove that if the vertex set of a directed graph can be partitioned into three subsets $V_{1}, V_{2}$, and $V_{3}$ such that edges only exist from $V_{1}$ into $V_{2}$, or from $V_{2}$ into...

You are considering the purchase of a machine with an initial outlay of $45,000 with a 5-year

Question:

Expert Answer:

The annual operating cash flow can be calculated using the followi... View the full answer

Fundamentals of Financial Management

Students also viewed these finance questions