After tax salvage cash flow for this new machine

Assignment Help Financial Management

Reference no: EM132057268

A company is considering a 5-year project to expand production with the purchase of a new automated machine using the latest technology. The new machine would cost $230,000 FOB St. Louis, with a shipping cost of $8,000 to the plant location. Installation expenses of $12,000 would also be required. This new machine would be classified as 7-year property for MACRS depreciation purposes. The project engineers anticipate that this equipment could be sold for salvage for $48,000 at the end of the project. If the corporate tax rate is 29%, what is the after tax salvage cash flow for this new machine at the end of the project? (Answer to the nearest dollar.)

MACRS percentages for depreciation each year are as follows:

Year %

1 14.29

2 24.49

3 17.49

4 12.49

5 8.93

6 8.93

7 8.93

8 4.45

Reference no: EM132057268

Questions Cloud

What is the npv of the proposed project for this firm : If the corporate tax rate is 32%, what is the NPV of the proposed project for this firm?

What is the percent market value of equity for this firm : what is the percent market value of equity for this firm? what is the total market value of this firm?

What is the after tax cost of debt for this firm : If the annual yield to maturity of the bonds is 6.14%, what is the after tax cost of debt for this firm?

What is the discounted payback for project : The required rate of return is 14% for projects at this company. What is the discounted payback for this project?

After tax salvage cash flow for this new machine : If the corporate tax rate is 29%, what is the after tax salvage cash flow for this new machine at the end of the project?

Calculate number of futures contracts required to synthesize : Calculate the number of futures contracts required to synthesize the cash, and state whether it will be a long or short position.

What is the financial and accounting break-even point : If the required rate of return is 11% per year, what is the accounting break-even point? what is the financial break-even point?

Exchange rates-interest rates and inflation rates : Below shows the information for exchange rates, interest rates and inflation rates in the US and Germany.

What is the after tax salvage cash flow : If the corporate tax rate is 29%, what is the after tax salvage cash flow for this new machine at the end of the project?

User Account

All Pages