Reference no: EM132906727

Your firm purchased machinery for $10.5 million and received immediate 100% bonus depreciation. The project, will end after 5 years. If the equipment can be sold for $5.0 million at the completion of the project, and your firm's tax rate is 21%, what is the after-tax cash flow from the sale of the machinery? (Enter your answer in millions rounded to 4 decimal places.)?The following table presents sales forecasts for Golden Gelt Giftware. The unit price is $30. The unit cost of the giftware is $10.

Year            Unit Sales

1                24,000
2                 32,000
3               16,000
4                 7,000
Thereafter         0

Problem 1: It is expected that net working capital will amount to 30% of sales in the following year. For example, the store will need an initial (Year 0) investment in working capital of .30 × 24,000 × $30 = $216,000. Plant and equipment necessary to establish the giftware business will require an additional investment of $202,000. This investment will be depreciated using MACRS and a 3-year life. After 4 years, the equipment will have an economic and book value of zero. The firm's tax rate is 21%. What is the net present value of the project? The discount rate is 12%. Use the MACRS depreciation schedule. (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.)