The goal of working capital management

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Reference no: EM131912519

1. The goal of working capital management is to

a. balance current assets an liabilities

b. pay off short term debts

c. achieve a balance between risk and return in order to maximize the firms value

d. achieve a balnce between short term an long term assets so that they add to the achievement of the firms overall goals

2. Your firm needs a computerized machine tool lathe which costs $50,000 and requires $12,000 in maintenance for each year of its 3-year life. After three years, this machine will be replaced. The machine falls into the MACRS 3-year class life category. Assume a tax rate of 35 percent and a discount rate of 12 percent. If the lathe can be sold for $5,000 at the end of year 3, what is the after-tax salvage value?

Reference no: EM131912519

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