Gemini llc invested 1 million in a state-of-the-art

Reference no: EM13597764

Gemini LLC invested $1 million in a state-of-the-art information system that promises to reduce processing costs for its purchasing activities by $120,000 per year. The company will scrap its old information system and will receive no money as a consequence. The new system will be depreciated over 10 years at a rate of $100,000 per year. Gemini's tax rate is 30 percent, and it has a 7 percent after-tax cost of capital.

Require:What is the after-tax net present value of Gemini's new information system? If required, use the minus sign to indicate a negative net present value.

Reference no: EM13597764

Questions Cloud

Food bear grocery store purchased a new u-scan machine at a : food bear grocery store purchased a new u-scan machine at a cost of 100000. annual operating cash inflows are expected

Denver company recently hired terry davis as an accountant : denver company recently hired terry davis as an accountant. he was given responsibility for all accounting functions

Assume that alshare company uses a periodic inventory : assume that alshare company uses a periodic inventory system and has these account balances purchases 450000 purchase

Identify at least two significant business trends that you : identify at least two significant business trends that you think will affect the accounting profession and the work

Gemini llc invested 1 million in a state-of-the-art : gemini llc invested 1 million in a state-of-the-art information system that promises to reduce processing costs for its

Which method of analyzing capital investment proposals : which method of analyzing capital investment proposals uses present value concepts to compute the rate of return for

When using the time adjusted rate of return method to rank : when using the time adjusted rate of return method to rank investment decisions the general rule isa. the lower the

Discuss whether you think a 10 percent capacity cushion is : a fast-food restaurant averages 150 customers per hour. the average processing time per customer is 90 seconds. a.

A manufacturing company uses a job order cost accounting : a manufacturing company uses a job order cost accounting system. overhead is applied using direct labor hours as an

User Account

All Pages