Depreciating using straight line depreciation

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1. Land yard company is considering an investment that will generate 600,000 in cash inflows per year for 7 years and has 240,000 of cash outflows for the same period ( before income taxes). The cost of the asset is 700,000 and it will be depreciating using straight line depreciation over the 7 year life. The asset has no salvage value. Land yards tax rate is 40%. The cost of capital is 18%. What is the annual after tax cash flow associated with this investment . A.176,000 B. 260,000 C. 216,000 D. 256,000 E. None

2. assume you receive $63,000 in three years and the annual interest rate is 5%. Using the present value formula, how much is that amount worth today dollars( rounded to the nearest dollars. A.54,422 B. 72,945 C.53,550 D. 63,000 E. None

3. most managers use spreadsheets to calculate the internal rate of return for an investment proposal.

True or false

4..An advantage of using the payback method for evaluating longterm investments is that it considers the time value of money.

True or false

5. the require rate of return is typically based on the company's. Cost of capital.

True or false

Reference no: EM131223440

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Depreciating using straight line depreciation : Land yard company is considering an investment that will generate 600,000 in cash inflows per year for 7 years and has 240,000 of cash outflows for the same period ( before income taxes). The cost of the asset is 700,000 and it will be depreciating u..
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