What are the terminal cash flows in year five

Assignment Help Financial Management

Reference no: EM131131357

Five years ago, ABC Company invested $55,638 in a machinery. The investment in net working capital was $9,468 which would be recovered at the end of the project. Today, ABC Company is selling the machinery for $16,277. The book value of the machinery is $23,853. The tax rate is 27 percent. What are the terminal cash flows in Year 5?

Reference no: EM131131357

Questions Cloud

Considering the purchase of new machine : Montilus Products Inc. is considering the purchase of a new machine, which will reduce manufacturing costs by $15,000 annually. Montilus will use the MACRS accelerated method to depreciate the machine (5-year MACRS class life), and it expects to sell..

Analyzing cash dividends on preferred and common stock : Analyzing Cash Dividends on Preferred and Common Stock Potter Company has outstanding 15,000 shares of $50 par value, 8% preferred stock and 50,000 shares of $5 par value common stock. If the preferred stock is noncumulative, determine the total amou..

Investment return-what was your percent return : Investment Return MedTech Corp stock was $51.80 per share at the end of last year. Since then, it paid a $1.30 per share dividend. The stock price is currently $63.35. If you owned 300 shares of MedTech, what was your percent return?

Computing straight-line and double-balance depreciation : Computing Straight-Line and Double-Declining-Balance Depreciation On January 2, Haskins Company purchases a laser cutting machine for use in fabrication of a part for one of its key products. Compute depreciation expense for each year of the machine..

What are the terminal cash flows in year five : Five years ago, ABC Company invested $55,638 in a machinery. The investment in net working capital was $9,468 which would be recovered at the end of the project. Today, ABC Company is selling the machinery for $16,277. The book value of the machinery..

Company will change to constant dividend policy : BDU Company has set up a new product line in January 2015. The dividend is expected to grow at 8% per year for the next 15 years. Then at 3% thereafter. The required return is 12% and the dividend in the coming year is $3.00. What is the stock price?..

Thinking about expanding its facilities : Sabina Bookstores is thinking about expanding its facilities. In considering the expansion, Sabina's finance staff has obtained the following information; the expansion will require the company to purchase initially (t=0) $5 million of equipment (thi..

Analysts predicted earnings per share : Analysts predicted earnings per share (EPS) for your company to be $0.12 at the close of 2020. How does this compare to actual EPS for 2020? If actual EPS is higher than the analysts’ prediction, what factors contributed to the success? If actual EPS..

What are possible capital components in the WACC equation : What are possible capital components in the WACC equation? What factors in the WACC are under a company’s control ? What factors are affected by the capital markets and interest rates ? What is the relevant risk of a stock, and how is it measured? Ho..

User Account

All Pages