Equipment would require an increase in net working capital

Assignment Help Financial Management

Reference no: EM13911120

The president of the company you work for has asked you to evaluate tehe proposed acquisition of a new chromatograph for th firm's R&D department. The equipments basic price is $70,000, and it would cost another $15,000 to modify it for special use by your firm. The chromatograph, which falls into the MACRS 3-year class, would be sold after 3 years for $30,000. The MACRS rates for the first three years are 0.3333, 0.4445, and 0.1481. Use of the equipment would require an increase in net working capital (spare parts inventory) of $4,000.

Reference no: EM13911120

Questions Cloud

The two main surgical units and their related data follow : Health Coop is an outpatient surgical clinic that wants to better understand its costs. It decides to prepare an activity based cost analysis, including an estimate of the average cost of both general surgery and orthopedic surgery.

What is expected return of a share of preferred stock : What is expected return of a share of preferred stock if the current price is $50 and it pays an annual dividend of $5?

What is the current expected dividend yield : Assuming we are in equilibrium conditions, what is the current expected dividend yield? What is the expected stock price one year from now? What is the current expected capital gains yield?

What is the dividend yield and capital gains yield : Calculate the required return for a stock which expects to pay a dividend of $1.50 this year. The dividends are growing at 2%, and the stock currently trades at $34.50 per share. What is the dividend yield and capital gains yield?

Equipment would require an increase in net working capital : The president of the company you work for has asked you to evaluate tehe proposed acquisition of a new chromatograph for th firm's R&D department. The equipments basic price is $70,000, and it would cost another $15,000 to modify it for special use b..

Identify and discuss some of the issues that are common : Identify and discuss some of the issues that are common to the planning, building, and operation of an ERP, CRM, or PLM enterprise system whether for an SME or a large multinational organization.

Horizon value of constant growth portion of firms dividends : Orwell Building Supply just paid a $2 dividend. The dividends are expected to grow at 30% for the first year, 25% for the second year, and then 15% for the third year. After which, the long-run rate is expected to be 6%. What is the expected dividend..

Bond from the previous example assume that this bond : (You have just purchased an outstanding 15-year bond with a par value of $1,000 for $1,145.68. It's annual coupon payment is $75.) For the same bond from the previous example assume that this bond is callable in 7 years a a price of $1,075. What is t..

What is the bonds yield to maturity : Yield to Maturity You have just purchased an outstanding 15-year bond with a par value of $1,000 for $1,145.68. It's annual coupon payment is $75. What is the bond's yield to maturity?

User Account

All Pages