Find the effect on our operating cash flows

Assignment Help Finance Basics
Reference no: EM131961086

Question: We are considering the purchase of a new rotator assembly. It will cost 400000. It should reduce our costs by 150000 per year for 4 years. We can depreciate it at 100000 per year. The tax rate is 35%. Find the effect on our operating cash flows for year 2.

Reference no: EM131961086

Questions Cloud

What is the npv and is this a good project : You are considering undertaking a project where a $12 million investment would generate after- tax cash flows of $3 million per year for 5 years.
What is the cost of equity of the consolidated : The Consolidated Transfer Co. is an all-equity financed firm. The beta is .75, the expected return on market is 12 % and the risk-free rate is 4%.
Construct a list of steps for making a cash withdrawal : Construct a list of steps for making a cash withdrawal from an automated teller machine (ATM). Assume that the process begins at the ATM with your bank card.
What is the ytm if the coupons are paid semi-annual : You are considering the purchase of a coupon bond with a face value of $1,000, which matures in 18 years, and pays 4.75% (annual) coupons.
Find the effect on our operating cash flows : We are considering the purchase of a new rotator assembly. It will cost 400000. It should reduce our costs by 150000 per year for 4 years.
Calculate the price-earnings ratio : You are considering an investment in Roxie's Bed & Breakfast Corp. During the last year, the firm's income statement listed an addition to retained earnings.
Calculate the market-to-book ratio : You are considering an investment in Roxie's Bed & Breakfast Corp. During the last year, the firm's income statement listed an addition to retained earnings.
Evaluate the sensitivity of your base-case npv : Evaluate the sensitivity of your base-case NPV to changes in fixed costs. What is the cash break-even level of output for this project (ignoring taxes)?
Which machine should you choose : You are considering the purchase of one of two machines used in your manufacturing plant. Machine A has a life of two years, costs $125 initially.

Reviews

Write a Review

Finance Basics Questions & Answers

  What are the after-tax cash flows for the company

Assume a corporation has earnings before depreciation and taxes of $100,000, depreciation of $25,000, and that it has a 25 percent tax bracket. What are the after-tax cash flows for the company?

  Expected return on the market portfolio

Suppose the yield on short-term government securities (perceived to be risk-free) is about 4%. What is the expected return on the market portfolio? What would be the expected return on a zero-beta stock?

  Transactions for wolverine company

On December 1, 2012, Wolverine receives $3,000 cash from a company that is renting office space from Wolverine. The payment, representing rent for December.

  How many hares of each stock does he own

If stock B triples in value and stock A goes up 50%, his stock will be worth $78,000 how many hares of each stock does he own.

  What were the forces of change involved

In a paper, critique a situation in either your current organization or a previous organization that required a great deal of change. Make sure, at a minimum, to address the following questions in your assessment:

  What is the equipments after-tax net salvage value

Kennedy can sell the used equipment today for $4.1 million, and its tax rate is 40%. What is the equipment's after-tax net salvage value (net cash flow from salvage)? Keep your answer in millions and round to two decimal places (e.g., 57.65 millio..

  Genaro needs to capture a return of 40 percent for his

1.genaro needs to capture a return of 40 percent for his one-year investment in a property. he believes that he can

  What is the yield-to- maturity of the bonds

The bonds pay 7.7% interest on a semiannual basis. The current market price of the bonds is $1,175. What is the yield-to- maturity of the bonds?

  What will be the rate of return over a three-year period

What will be the rate of return over a 3-year period to the contractor that paid for, installed, and operates the system, if its initial cost was $9,000,000 and the profit for each of the 3 years is the same as it was in 2010?

  Discuss the marginal tax rate

(Calculating free cash flows) Racin' Scooters is introducing a new product and has an expected change in EBIT of $475,000. Racin' Scooters has a 34 percent.

  Calculate the predetermined overhead rate

Calculate the predetermined overhead rate that would be used under traditional overhead costing - Calculate the product cost per unit for the Basic and Advanced products under traditional costing

  A project has an expected risky cash flow of 500 in year 4

a project has an expected risky cash flow of 500 in year 4. the risk-free rate is 4 the market rate of return is 13 and

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