What is annual cash flow generated from the tax shield

Assignment Help Financial Management

Reference no: EM132053202

You have purchased a machine at $1,000,000. You plan to use and fully depreciate this machine in 5 years via straight line method. Each year this is also a maintenance cost of $800. The tax rate is 35%.

What is the annual cash flow generated from the tax shield for the next 5 years? You must round up your answer as integer and write it as a positive value. (Hint: It is asking you what the annual tax shield cash flow is from operating this machine, not the NPV).

Reference no: EM132053202

Questions Cloud

What is your after tax wacc : You have acquired 30 million dollar by issuing bond. What is your after tax WACC?

Wonderful retirement life : If you want to have a wonderful retirement life, How much money do you need to have when you retire, to achieve this goal?

Explain the common measures of spread and dispersion : Define and explain the common measures of spread and dispersion.

Offered increases inputs in producing multiple products : Which of the following implies reduced unit costs as the range of products offered increases inputs in producing multiple products?

What is annual cash flow generated from the tax shield : What is the annual cash flow generated from the tax shield for the next 5 years? You must round up your answer as integer and write it as a positive value.

What is the cost of trade credit to the firm : Suppose a firm purchases goods on credit with terms of 3/10, net 25. What is the cost of trade credit (APR) to the firm if it always pays its bill on Day 8.

Maximum amount of mortgage loan you can take out : You know the maximum monthly payment you can afford is $2550. What is the maximum amount of mortgage loan you can take out?

What is the npv of the cost of this ownership : You decided to purchase a machine for a 5 year operation. What is the NPV of the cost of this ownership ?

What is the company cost of preferred stock-rp : The stock would pay a constant annual dividend of $5.50 a share. What is the company's cost of preferred stock, rp?

User Account

All Pages