Calculate the total cash flow net of income taxes in year

Assignment Help Accounting Basics
Reference no: EM132085485

Question - Prudencio Corporation has provided the following information concerning a capital budgeting project:

After-tax discount rate

13%

Tax rate

30%

Expected life of the project

4

Investment required in equipment

$160,000

Salvage value of equipment

$0

Annual sales

$400,000

Annual cash operating expenses

$290,000

One-time renovation expense in year 3

$40,000

The company uses straight-line depreciation on all equipment. Assume cash flows occur at the end of the year except for the initial investments. The company takes income taxes into account in its capital budgeting.

Calculate the total cash flow net of income taxes in year 3?

$70,000

$49,000

$89,000

$61,000

Reference no: EM132085485

Questions Cloud

Prepare the appropriate adjusting entry for depreciation : Wardell Company purchased a mini computer on January 1, 2011, at a cost of $32,350. The computer has been depreciated using the straight-line method.
What is a warranty liability : What is a warranty liability? What is the purpose of accruing a warranty liability before any actual claims are made?
Power plant to the customer get very hot : Long wires, that carry electricity from the power plant to the customer get very hot due to the amount of current as well as the amount of conductive material
What are committing strategies in assessment of technology : Explain the most important elements and the role of identification and assessment of emerging technologies in the organization or company?
Calculate the total cash flow net of income taxes in year : The company uses straight-line depreciation on all equipment. Calculate the total cash flow net of income taxes in year 3
How much is recorded in the warranty liability account : In 2013, BMJ Plumbing Company sold 250 water heaters for $1,050 each. The water heaters carry a 5-year warranty for repairs. BMJ Plumbing estimates.
What is the portfolio weight on the spdrs : You want to build a two asset portfolio including SPDRs and T-Bills that has an expected return of 5.50%. A SPDR is a Standard and Poor's Depositary Receipt.
What is the depletion expense : The Weber Company purchased a mining site for $1, 750,000 on July 1. The company experts to mine ore for the next 10 years and anticipates that a total.
Edge length of the face-centered cubic : Platinum (atomic radius = 1.38 Å) crystallizes in a cubic closely packed structure. What is the the edge length of the face-centered cubic unit cell and the den

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd