Equipment after-tax salvage value-capital budgeting analysis

Assignment Help Financial Management

Reference no: EM131020529

Amigo Gas Co. is selling off some old equipment it no longer needs because its associated project has come to an end. The equipment originally cost $27,500, of which 75% has been depreciated. The firm can sell the used equipment today for $5,000, and its tax rate is 30%. What is the equipment's after-tax salvage value for use in a capital budgeting analysis?

Reference no: EM131020529

Questions Cloud

Create the project as if it came from them : I think the scientist has the right to misconduct simply fact cause will experient and create any new project with his or her new ideas and the other will act if they came up with the idea or will steal your ideas and create the project as if it c..

Would the elasticity of demand likely be greater or less : The Energy Information Administration estimated that in 2012 American consumers spent 4 percent of their incomes on gasoline. Would the elasticity of demand likely be greater or less if consumers had spent 8 percent of their incomes on gasoline?

Which dividends are expected to grow at a rate : The last dividend paid by Wilden Corporation was $1.55. The dividend growth rate is expected to be constant at 1.5% for 2 years, after which dividends are expected to grow at a rate of 8.0% forever. The firm's required return (rs) is 11.0%. What is t..

Considering manufacturing a new style of dress : Loco Company is considering manufacturing a new style of dress. The equipment to be used costs $99,000 and would be depreciated to zero by the straight-line method over its 3-year life. It would have a zero salvage value, and no new working capital w..

Equipment after-tax salvage value-capital budgeting analysis : Amigo Gas Co. is selling off some old equipment it no longer needs because its associated project has come to an end. The equipment originally cost $27,500, of which 75% has been depreciated. The firm can sell the used equipment today for $5,000, and..

Where do embryonic stem cells come from : Compare and contrast how embryos/embryonic cells are used in artificial reproductive technologies (ART or in vitro fertilization) versus embryonic stem cell therapy. What is the ultimate objective of ART vs. embryonic stem cell therapy?

What is the best estimate of the current stock price : The last dividend paid by Wilden Corporation was $1.55. The dividend growth rate is expected to be constant at 1.5% for 2 years, after which dividends are expected to grow at a rate of 8.0% forever. The firm's required return (rs) is 11.0%. What is t..

Compute the net present value for each investment : Compute the net present value for each investment. Provide a memo to the management with a recommendation.

Compute the value of this stock with a required return : A firm is expected to pay a dividend of $3.05 next year and $3.20 the following year. Financial analysts believe the stock will be at their price target of $65 in two years. Compute the value of this stock with a required return of 13.0 percent. (Rou..

User Account

All Pages