Determine the atcf for each year

Reference no: EM132029903

Question: 1) Milliken uses a digitally controlled dyer for placing intricate and integrated patters on manufactured carpet squares for home and commercial use. It is purchased for $400,000. It is expected to last 8 years and have a salvage value of $30,000. Increased net income due to this dyer is $95,000 per year. Milliken's tax rate is 40 percent, and the after-tax MARR is 12 percent. Develop tables using a spreadsheet to determine the ATCF for each year and the after-tax PW using MACRS and 5 year property class.

2) Suppose Milliken has an opportunity with similar cash flows to those in problem 1 for a digitally controlled dyer, although there are no depreciable items. They can invest in a marketing study by a blue-ribbon consultancy costing $400,000. Expected net returns are $95,000 per year over 7 years and $125,000 during the eighth year. Milliken's tax rate is 40 percent, and the after-tax MaRR is 12 percent.

a. Develop tables using a spreadsheet to determine the ATCF for each year and the after-tax PW.

b. Compare the results of Part A with those of Problem 1. Explain the differences.

Reference no: EM132029903

Questions Cloud

Summarize the policy and its purpose for management : Summarize the policy and its purpose for management. This is typically an explanation of why the policy exists. Don't be too technical.

How many quarters of coverage has jordan attained : For part of the summer of this year, Jordan worked full time at a local accounting firm. Jordan is a 19-year-old accounting student attending a state university

What is the disk angular acceleration : It takes 30 rotations to reach an angular velocity of 10 rad/s. What is the disk's angular acceleration?

What are common stockholders residual claims to earnings : What are the common stockholders’ residual claims to earnings? how many directors can the dissident stockholders elect with the proxies they now hold?

Determine the atcf for each year : Milliken uses a digitally controlled dyer for placing intricate and integrated patters on manufactured carpet squares for home and commercial use.

Explain how revenue should be recognized : Instructions - For each situation, explain how revenue should be recognized under the earnings approach. Be sure to include your reasoning

What are the payments going to be : You are purchasing a car with no money down and have borrowed $51,000 at an annual interest rate of 6.3 percent. The terms of the loan require you to pay off.

Sample of wood from the same region : If there was a wooden artifact found in an ancient tomb and It's carbon-14 (14 6 C) activity was measured to be 60.0% of that in a fresh sample

Which gpo policy takes precedence in the case : Is using the option to Store passwords using reversible encryption a good security practice? Why or why not?

User Account

All Pages