Determine the estimated after-tax cash ?ow

Assignment Help Financial Management

Reference no: EM131073217

Tampa Electric Company (TECO) is planning a major upgrade in its computerized demand management system. In order to accommodate this upgrade, a building will be constructed on land already owned by the company. The building is estimated to cost $1.8M and will be opened in August of this year. The computer equipment for the building will cost $2.75M, and all of?ce equipment will cost $225,000. Annual expenses for operating this facility (labor, materials, insurance, energy, etc.) are expected to be $325,000 for the rest of this year. Use of the new demand management system is expected to decrease fuel and other costs for the company by $1.8m this year. If the company expects to earn 9% on its investments, is in the 35% tax bracket, and uses a 20-year planning horizon, determine the estimated after-tax cash ?ow from this project for this year.

Reference no: EM131073217

Questions Cloud

Equity comes from retained earnings : Javits & Sons' common stock currently trades at $37.00 a share. It is expected to pay an annual dividend of $2.50 a share at the end of the year (D1 = $2.50), and the constant growth rate is 8% a year. What is the company's cost of common equity if a..

What is the company cost of preferred stock : Tunney Industries can issue perpetual preferred stock at a price of $56.00 a share. The stock would pay a constant annual dividend of $5.50 a share. What is the company's cost of preferred stock, rp? Round your answer to two decimal places.

Apply capital budgeting and time value money concepts : You have recently been hired by ABC corporation and your first assignment is to help them decide which of these two options should be pursued. ABC Corporation has a machine that requires repairs or should be replaced.

Context of theoretical explanations of market bubbles : Bubbles are nothing more than irrational exuberance in action”. Critically evaluate this statement in the context of theoretical explanations of market bubbles.

Determine the estimated after-tax cash ?ow : Tampa Electric Company (TECO) is planning a major upgrade in its computerized demand management system. In order to accommodate this upgrade, a building will be constructed on land already owned by the company. The building is estimated to cost $1.8M..

What is the present value of the cash flows : The state lottery's million-dollar payout provides for $1.3 million to be paid in 20 installments of $65,000 per payment. The first $65,000 payment is made immediately, and the 19 remaining $65,000 payments occur at the end of each of the next 19 yea..

How much must you deposit each year to obtain your goal : To pay for your child's education, you wish to have accumulated $19,000 at the end of 13 years. To do this, you plan to deposit an equal amount into the bank at the end of each year. If the bank is willing to pay 7 percent compounded annually, how mu..

Considering issuing bonds : Pybus, Inc. is considering issuing bonds that will mature in 23 years with an annual coupon rate of 9 percent. Their par value will be $1,000, and the interest will be paid semiannually. Pybus is hoping to get a AA rating on its bonds and, if it does..

Cash outlay required to replace the existing fleet : The Queensland Land and Cattle Company (QL&CC) is one of the largest cattle-buyers in the country. It has buyers at all the major cattle auctions throughout eastern Australia who buy on the company's behalf and then have cattle shipped to Longreach, ..

User Account

All Pages