Determine after-tax equivalent present worth

Assignment Help Financial Management

Reference no: EM131596547

A certain engine lathe can be purchased for $180,000 and depreciated over three years to a zero salvage value with the SL method. This machine will produce metal parts that will generate revenues of $120,000 (time zero dollars) per year. It is a policy of the company that the annual revenues will be increased each year to keep pace with the general inflation rate, which is expected to average 3% per year. Labor, materials, and utilities totaling $30,000 (time 0 dollars) per year are all expected to increase at 5% per year. The firm's effective income tax rate is 50%, and its after-tax MARR (i_m) is 6% per year. Determine the after-tax equivalent present worth. Use life of three years and work to the nearest dollar. (Do not enter the dollar sign $ with your answer.)

Reference no: EM131596547

Questions Cloud

What is family systems theory : What is family systems theory? Assess whether it is possible to diversify away the risk inherent in investments.

Configuration and troubleshooting of complex eigrp networks : Explain and demonstrate competence in the configuration and troubleshooting of complex EIGRP networks.

Analyze a high-level timeline that includes key tasks : Analyze a high-level timeline that includes key tasks and deadlines. Describe at least three project goals and three project objectives.

What is market for inventory : What is market for inventory? What is cost for inventory? How do you arrive at market? How do you arrive at cost

Determine after-tax equivalent present worth : The firm's effective income tax rate is 50%, and its after-tax MARR (i_m) is 6% per year. Determine the after-tax equivalent present worth.

What are the target total variable costs : Actual costs are currently higher than target full product cost. Assuming that fixed costs cannot be reduced, what are the target total variable costs

Explain your future goals based on the transferable skills : Transferable Skills Self Reflection. Explain your future goals based on the transferable skills that you've chosen to showcase.

Write cross-reference program which builds a data structure : CSC-220 - Write a cross-reference program which builds a data structure with all words included from a text file and records the line numbers

Find unique intervals of time to wash dishes : I have recently created a new dishwasher that uses heated air in unique intervals of time to wash dishes without the need for water.

User Account

All Pages