Determine the relevant after-tax cash flows

Assignment Help Finance Basics
Reference no: EM13269225

A machine can be purchased for $10,500, including transportation charges, but installation costs will require $1,500 more. The machine is expected to last four years and produce annual cash revenues of $6,000. Annual cash operating expenses are expected to be $2,000, with depreciation of $3,000 per year. The fi rm has a 30 percent tax rate. Determine the relevant after-tax cash flows and prepare a cash flow schedule.

Reference no: EM13269225

Questions Cloud

Explain how to calculate nf in term of a pure ratio : The NF (dB) is defined as 10log(SNRin/SNRout) - in the unit of dB. If we are given the values of SNRin and SNRout in dB unit, how do we calculate NF (dB) in terms of dB, and how do we calculate NF in term of a pure ratio
Can champoux pay the proposed dividend : The firm's bond indenture prohibits the payment of dividends unless the cash flow (before dividends and sinking fund payments) is greater than the total of dividends, interest, and sinking fund obligations.
What temperature the water boil on the top of mount everest : At what temperature does water boil on the top of Mount Everest, elevation z=8848m. Recall that the dependence of pressure with altitude is given by P=Patmexp^(-MWgz/RT) where, Patm is atompheric pressure, g is the gravitational acceleration, and ..
Calculate the payback period for the machine : Use the information in Problem 10 to do the following: a. Calculate the payback period for the machine. b. If the project's cost of capital is 10 percent, would you recommend buying the machine? c Estimate the IRR for the machine.
Determine the relevant after-tax cash flows : Determine the relevant after-tax cash flows and prepare a cash flow schedule.
Does it make sense that the output of the filter is sinewave : a 50 kHz squarewave is input to the 60 kHz low pass filter. The filter is effective at rejecting frequencies higher than 60 kHz. a. Does it make sense that the output of the filter is a 50 kHz sinewave
Find the length of a side of a cube : Find the length of a side of a cube having a mass of 1.3 kg and the density of nuclear matter, taking this to be 2.3 ? 1017 kg/m3
What type of qualified plan would you advise for michael : if they need to expand their business. What type of qualified plan would you advise for Michael and Janet? Why?
Estimate surface temperature of chip if it dissipates power : Experiments have revealed that flow over the board is disturbed by the elements and that convection heat transfer is correlated by an expression of the form Nux = 0.4 Re0.85 Pr 1/3 . Estimate the surface temperature of the chip if it is dissipatin..

Reviews

Write a Review

Finance Basics Questions & Answers

  Calculate total and annual cost

An oil firm arranged a $10,000,000 revolving credit agreement with a group of small banks. The company paid an yearly commitment fee of one-half of one percent of the unused balance of loan commitment.

  Include depreciation and working capital

include depreciation and working capital in the following NPV analysis, because depreciation for the machinery goes for longer than the project timeline, and working capital needs to be accounted for as a percentage of sales.

  Expected annual cost of the current maintenance policy

The fire department has a number of failures with oxygen masks & is  Assessing its  possibility of outsourcing the preventive maintenance to the manufacturer.

  What is the company break-even ebit

Given the break-even EBIT and the expected annual EBIT of FC, should the firm take on debt equal to 40% of its levered value or not? Justify your answer.

  What other information would you like to examine

Do the balance sheet, income statement, and the statement of cash flows contain all the information you might want as a potential lender or stockholder? What other information would you like to examine?

  Predicting the company likely balance sheet

Do you think the percentage of sales method may be more or less accurate in predicting the company's likely balance sheet?

  What is the current dividend per share

If it's the company's policy to always maintain a constant growth rate in its dividends, what is the current dividend per share?

  Find the amount of money that went to jay and to demsey

The riskless rate at the time was 3.1%, and the sigma of Smugglers Notch Company was 0.55. Find the amount of money that went to Jay and to Demsey.

  Demand without relaxing

Suppose that you are the manager of a professional soccer team and that you are negotiating a agreement with your team's star player. You can afford to pay the player only 1.5 million a year over three years

  How big would the annual payments be

On December 31, Beth Klemkosky bought a yacht for $50,000, paying $10,000 down and agreeing to paythe balance in 10 equal end of year installments and 10 percent interest on the declining balance. How big would the annual payments be?

  Sources of short-term-medium-term and long-term

What are some sources of short-term, medium-term, and long-term international financing? What are the costs associated with each of these sources?

  Determine the amount of interest expense

S. Strigel Chemical Corporation issued $5,000,000 face value, 10%, 10-year bonds at $5,679,533. This price resulted in an 8 percent effective-interest rate on the bonds.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd