Reference no: EM131338274
Hurley's Winery is planning to acquire a new grape masher. The masher will cost $100,000 including shipping and installation and will be depreciated as a 7-year MACRS asset.
At the time the masher is purchased, Hurley will have to invest $5,000 in net working capital. Additional investments in net working capital are required at the end of year 1 ($3,000) and year 2 ($2,000). Net revenues attributable to the masher are expected to total $25,000 during year 1 and to grow by 5 percent per annum through the end of year 6.
After that time, revenues are expected to decline by 10 percent per annum. Annual year 1 cash operating expenses are expected to total $10,000 and to grow at an annual rate of 10 percent per annum. Hurley expects to sell the masher at one second after midnight on the first day of year 8 for $10,000. The marginal tax rate for Hurley is 40 percent for ordinary income and 28 percent for capital gains.
(Hint: See Appendix 9A for information on MACRS depreciation.)
Compute the expected net cash flows for year 7. Include in your year 7 calculations the proceeds from the salvage value of the masher and recovery of net working capital at the beginning of year 8. For the purposes of present value calculations, you may assume that the end of year 7 is the same as the beginning of year 8.
|
Effective job of keeping doctors
: Explain why DRGs were developed, and how they were designed to function. In your opinion, has the government's implementation of DRGs done an effective job of keeping doctors within cost limits when treating patients? Your response should be at le..
|
|
Use of arrays with a programming language
: Use different program control statements in a programming language - Demonstrate the use of arrays with a programming language and Define and work with classes and objects in a programming language.
|
|
How does this compare to the actual average
: According to your model, what is the average temperature in May? How does this compare to the actual average?
|
|
Prepare a classified balance sheet in good form
: Prepare a classified balance sheet in good form. Common stock authorized was400,000shares, and preferred stock authorized was 20,000 shares.
|
|
Compute the expected net cash flows for year 7
: Compute the expected net cash flows for year 7. Include in your year 7 calculations the proceeds from the salvage value of the masher and recovery of net working capital at the beginning of year 8.
|
|
Interactions of members and increase productivity
: Working with organizations to improve the interactions of members and increase productivity through collaborative behavior is an essential role of the organization development human resources specialist.
|
|
Calculate the expected net cash flows for year 3
: Hayward Enterprises, a successful imaging products firm, is considering expanding into the lucrative laser-engraved self-portrait business- Calculate the expected net cash flows for year 3.
|
|
Discuss the relative roles of sin and guilt
: Discuss the relative roles of sin, guilt, conscience, weakness and power in Paul's view of human beings.Compare and contrast later Christian views of the human problem and its solution to Paul's understanding of the human problem and its solution.
|
|
Find the amplitude of a sinusoidal function
: Write a sinusoidal function to model the tides, using t to represent the number of hours in decimals since midnight.
|