Calculate the initial investment in the high-powered

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If Halley Industries reimburses employees who earn master's degrees and who agree to retain with the firm for an additional 3 years, should the expenses of the tuition reimbursement be categorized as a capital expenditure or an operating expenditure?

Iridium Corp. has spent 3.5 Billion over the past decade developing a satellite-based telecommunications system. It is currently trying to decide whether to spend an additional $350 Million on the project. The form expects that its outlay will finish the project and will generate cash flow of $15 Million per year over the next 5 years. A competitor has offered $450Million for the satellites already in orbit. Classify the firm's outlay as sunk costs or opportunity costs, and specify the relevant cash flows.

Canvas Reproductions, Inc., has spent $4,500 dollars researching a new project. The project requires $20k worth of new machinery, which would cost $3K to install. The company would realize $4K in after-tax proceeds from the sale of old machinery. If Canvas' working capital is unaffected by this project, what is the initial investment amount for this project?

A few years ago, Largo Industries implemented an inventory auditing system at an installed cost of $175K. Since then, it has taken depreciation deductions totaling $124,250. What is the system's current book value? If Largo sold the system for $110K, how much recaptured depreciation would result?

Bryson Sciences is planning to purchase a high-powered microscopy machine for $55K and incur and additional $7,500 in installation expenses. It is replacing similar equip. That can be sold to net $35K resulting in taxes from a gain on the sale of $11,250. Because of this transaction, current assets will increase by $6K and current liabilities will increase by $4K. Calculate the initial investment in the high-powered microscopy machine.

 

Reference no: EM13288195

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