Evaluate proposed acquisition of new special-purpose

Assignment Help Financial Management

Reference no: EM131575897

You have been asked by the president of your company to evaluate the proposed acquisition of a new special-purpose truck for $60,000. The truck falls into the MACRS 3-year class, and it will be sold after three years for $19,800. Use of the truck will require an increase in NWC (spare parts inventory) of $1,800. The truck will have no effect on revenues, but it is expected to save the firm $20,400 per year in before-tax operating costs, mainly labor. The firm’s marginal tax rate is 34 percent. What will the cash flows for this project be? (Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places.) Year 0 1 2 3 FCF $ $ $ $

Reference no: EM131575897

Questions Cloud

Assignment-module review questions and exercise : Answer the module review questions listed below. These questions were chosen to demonstrate your understanding and help you assess your progress.

How much should you decrease the price of a tee time : To increase sales by the desired amount, how much should you decrease the price of a tee time in percentages

Money can he borrow from the bank on basis of information : If a bank loans money at an interest rate of 7.3%?, how much money can he borrow from the bank on the basis of this? information?

Briefly discuss the process of making a bill into law : Briefly discuss the process of making a bill into law. What type of bill would you introduce if you could? Why? Why is it so hard to pass legislation?

Evaluate proposed acquisition of new special-purpose : You have been asked by the president of your company to evaluate the proposed acquisition of a new special-purpose truck for $60,000.

Compute the additional investment in accounts receivable : Compute the additional investment in Accounts Receivable. Compute the incremental Return on New Investment.

Overview of different delivery methods for training : Organizations can avoid investing in training and development activities because it is difficult to quantify the ROI return on investment

What congressional powers are outlined in the constitution : What congressional powers are outlined in the constitution? What are the major differences between the Senate and the House of Representatives?

What are the roles of the president : What are the roles of the president? Are some more of a figurehead role? Would George Washington agree with the current presidency?

User Account

All Pages