Generate an additional cashflow after tax

Assignment Help Financial Management

Reference no: EM131055838

The firm is considering the purchase of a new machine. The machine costs $31,500 and will produce an after-tax cash flow of $5481 per year at the end of each of the next 9 years. The disposal of equipment will generate an additional cashflow after tax of - $500 at year 9. If the discount rate is 12%, what is the net present value ( NPV) of this investment?

Reference no: EM131055838

Questions Cloud

Decided to start saving for your retirement : You have decided to start saving for your retirement. You feel starting at the end of this year you will bw able to save 2000 a year for 10 years and 5000 a year for the next 15 years after that. before you retire you feel that you will earn 10% inte..

Describe what you learned about the art criticism theory : For the last segment of your Art Appreciation Gallery Course Project, you will be adding a comprehensive statement to your PowerPoint presentation and finalizing your segments from the previous units. You will submit the entire presentation, inclu..

On economics applications of evolutionary game theory : Write a critique analysis not more than 6 pages using his journal and others sources from his reference to to criticize.

Nominal versus effective cost of debt : Nominal Versus effective cost of debt: Black & Decker–a U.S. multinational manufacturer of small power tools–is considering financing a plant expansion in France with euro(¤) Eurobonds. Would your answer change if exchange losses on principal repayme..

Generate an additional cashflow after tax : The firm is considering the purchase of a new machine. The machine costs $31,500 and will produce an after-tax cash flow of $5481 per year at the end of each of the next 9 years. The disposal of equipment will generate an additional cashflow after ta..

What is the firm cost of retained earnings : The firm has net income of $2 million, Sales of $15 million, total assets of $14 million, common equity of $9 million, and common dividend of $1 million, and 1 million shares outstanding with a total market value of $23 million. What is the firm's co..

Confidence interval for the true proportion of high school : Dylan wants to determine a 99 percent confidence interval for the true proportion of high school students in the area who attend their home basketball games. How large of a sample must he have to get a margin of error less than 0.04? [To find n, u..

What is the standard deviation of the revised portfolio : Research reported in the chapter shows that the correlation between the U.S. and Japanese stock markets is 0.35. Assume that the standard deviations of the two markets are 15 percent and 18 percent, respectively. What is the variance of the revised p..

Describe what working capital practices : Describe what working capital practices, including methods of capital budgeting analysis techniques. Analyze the potential pitfalls in capital budgeting practices that a business should be aware of. Develop a simple statement of cash flows for the bu..

User Account

All Pages