The effect of selling the van on the third year cash flow

Assignment Help Financial Management
Reference no: EM131580668

We are thinking of buying a new delivery van. It will cost 30000. We will use three years MACRS for depreciation. We think that at the end of the third year we can sell it for 12000. The tax rate is 40%. What would be the effect of selling the van on the third year cash flow?

Reference no: EM131580668

Questions Cloud

Present value of interest tax shields from this debt : What is the present value of the interest tax shields from this debt?
What is cost of equity : SoCal Electronics just paid it annual dividend of $0.80 a share. What is the cost of equity?
What is the length of the annuity time period : Mr. I . Casillas is considering an annuity which costs $100,000 today. What is the length of the annuity time period?
What is initial market value of the unlevered equity : what is the initial market value of the unlevered equity?
The effect of selling the van on the third year cash flow : We are thinking of buying a new delivery van. What would be the effect of selling the van on the third year cash flow?
Discuss favor of the attorney''s position : Do you believe that the judge should be held to a higher standard because of the fact that he works within the justice system
Discuss challenges in studying white collar crime : What are some of the specific challenges in studying white collar crime relative to the study of conventional crime
What are the elements of trafficking in stolen goods : What are the elements of trafficking in stolen goods. What are the requirement for a conviction under the federal RICO law
Discuss one of the main criticisms of structuralism : Analyze the limitations and strengths of the method of studying consciousness in parts.discuss one of the main criticisms of structuralism.

Reviews

Write a Review

Financial Management Questions & Answers

  Assume that lauryn has reported equity beta

Lauryn’s Doll Co. had EBIT last year of $56 million, which is net of a depreciation expense of $5.6 million. In addition, Lauryn made $5.30 million in capital expenditures and increased net working capital by $2.7 million. Assume that Lauryn has a re..

  Calculate the expected liquidity premium yields

Calculate the expected liquidity premium yields for a (1,3,2) path. Calculate the real world yield for a (3,2) path.

  What is the value of the option to abandon the project

What is the NPV of the base case? What is the value of the option to abandon the project?

  What is their break-even level of operating income

what is their break-even level of operating income (i.e., the level of EBIT where EPS is the same for both firms)?

  What are the shareholder earnings from the corporation

Consider a C corporation. The corporation earns $5 per share before taxes. After the corporation has paid its corresponding taxes, it will distribute 0% of its earnings to its shareholders as a dividend. What are the shareholder's earnings from the c..

  What is present value of the annuity

A 10-year annuity pays $2,900 per month, and payments are made at the end of each month. The interest rate is 8 percent compounded monthly for the first six years, and 6 percent compounded monthly thereafter. What is the present value of the annuity?

  What is its self-supporting growth rate

Maggie's Muffins, Inc., generated $2,000,000 in sales during 2015, and its year-end total assets were $1,700,000. Also, at year-end 2015, current liabilities were $1,000,000, consisting of $300,000 of notes payable, $500,000 of accounts payable, and ..

  Stockholders after payment of interest and corporate taxes

Suppose that it is financed by a combination of common stock and $1.18 million of debt. The interest rate on the debt is 9%, and the corporate tax rate is 40%. How much profit is available for common stockholders after payment of interest and corpora..

  Regarding investment decision-making criterion

Which one of the following is false regarding investment decision-making criterion?

  What is the price per share of firm after the acquisition

Firm A is acquiring Firm B for $25,000 in cash. Firm A has 3,000 shares of stock outstanding at a market value of $21 a share. Firm B has 1,200 shares of stock outstanding at a market price of $17 a share. Neither firm has any debt. The net present v..

  Requirements are key for enhancing analytical capabilities

What organizational requirements are key for enhancing analytical capabilities?

  The growth rate in dividend is expected

A common stock has just paid a dividend of $1.64/share. The dividend is expected to grow by 16% for the coming 25 years. After that, the growth rate in dividend is expected to be 5% per year in perpituity. The RRR on the stock is 10%. What is the val..

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