Reference no: EM133111484
Question - The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $1,110,000, and it would cost another $24,000 to install it. The machine falls into the MACRS 3-year class, and it would be sold after 3 years for $636,000. The MACRS rates for the first three years are 0.3333, 0.4445, and 0.1481. The machine would require an increase in net working capital (inventory) of $16,500. The sprayer would not change revenues, but it is expected to save the firm $321,000 per year in before-tax operating costs, mainly labor. Campbell's marginal tax rate is 25%. (Ignore the half-year convention for the straight-line method.) Cash outflows, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the nearest dollar.
Required -
1. What is the Year-0 net cash flow?
2. What are the net operating cash flows in Years 1, 2, and 3?
3. What is the additional Year-3 cash flow (i.e, the after-tax salvage and the return of working capital)?
4. If the project's cost of capital is 11%, what is the NPV of the project?
6. Should the machine be purchased?
|
How much is the Capital Gains Tax
: Dividend from a domestic corporation 300,00. How much is the Capital Gains Tax assuming the corporation is a resident foreign corporation
|
|
How much is the final withholding tax
: How much is the final withholding tax assuming the corporation is nonresident foreign lessor of vessels chartered to Philippine nationals
|
|
Determine the business income for the year
: The single proprietorship reported the following changes during the year: Increase in total assets P250,000; Determine the business income for the year
|
|
What is the weighted-avg number of shares outstanding
: On November 1, 600,000 shares were sold for $25 per share. What is the weighted-avg number of shares outstanding for 2021
|
|
Should the machine be purchased
: The sprayer would not change revenues, but it is expected to save the firm $321,000 per year in before-tax operating costs, Should the machine be purchased
|
|
Journalize the adjusting entries required at March
: Journalize the adjusting entries required at March 31. Refer to the Chart of Accounts for exact wording of account titles
|
|
Determine the unrealized gain on transfer to ST Company
: S Co. invested equipment with a carrying amount of P150,000. Determine the unrealized gain on transfer to ST Company on January 1, 2020
|
|
What the initial amount recorded in Agaton capital account
: Agaton joined a partnership by contributing the following: cash, P1,200,000; What the initial amount recorded in Agaton capital account
|
|
By how much would Lopez account decrease
: Partners Lopez and Antonio receive a salary of P150,000 and P300,000, respectively, By how much would Lopez account decrease
|