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We are considering the purchase of a $560,000 computed based inventory management system. It is in class 10 with a CCA rate of 30 per cent. The computer has a four-year life. It will be worth $30,000 at that time. The system would save us $60,000 pre-tax in inventory-related cost. The relevant tax rate is 38%. Because the new setup is more efficient than our existing one, we would be able to carry less total inventory and thus free $45,000 in net working capital. Required return is 16%
1. Calculate the present value of CCA tax shield.
2. Explain why the CCA tax shield is consider a source of cash-inflow.
The market value of the assets of a corporation is currently $290.0 million but the owners wish to only use as collateral a value that will result in an interes
Present value: Tommie Harris is considering an investment that pays 6.5 percent annually. How much must he invest today such that he will have $25,000 in seven years? (Round to the nearest dollar.)
Using the latest consolidated financial statements of Briscoes Ltd critically analyse the claims made by the company with supporting computations. Are the claims made in the report realistic?
1. Define liquidity risk and distinguish between asset liquidity and liability liquidity management. What are the main features of an effective liquidity management strategy for a typical commercial bank?
What part of the federal Fair Housing Act is applicable to an apartment project?- Define net lease. - Why does shopping center management promote shopper-attraction activities?
What is the asset beta if the corporate tax rate is 30% Answer 1.20 Ba = Be(E/V) + Bd(D/V) How do you get D/V = 0.286 and e/V = 0.714?
Explain why such warning behavior is likely to occur only in groups that are genetically related.
An all equity firm has net income of $27,300, depreciation of $7,400 and taxes of $2,050. what is the firms operating cash flow?
Given the facts in the problem, what is the best estimate of the value of one of these bonds today? Why? (No calculations necessary.)
If the bank is offering a 5-year amortized car loan that has a 4.80% nominal interest rate with monthly payments and you figure you can handle paying $500 a month, what price will you be able to pay today for a car?
calculate operating profit ratio from the followingnbsprsgross profit150000sales907500operating expenses60000sales
havanna tobacco farms just paid a dividend of 400 pesos on its stock. the growth rate in dividends is expected to be a
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