What is the after-tax cash flow from the sale of asset

Assignment Help Financial Management
Reference no: EM131983804

Billy Bob's Monster Trucks is considering the purchase of some new vehicles. The total cost for the vehicles is $404,800 and they are to be depreciated straight-line to zero over 9 years. The vehicles will be used for 4 years, after which they can be sold for $50,600. If the relevant tax rate is 33 percent, what is the after-tax cash flow from the sale of this asset? (Do not round your intermediate calculations.) NOTE: Taxes are affected when the asset is sold at either a gain or loss over book value.

Reference no: EM131983804

Questions Cloud

What is the forward premium-discount implied by CIRP : how many (pre-tax) dollars will you have? What is the forward premium/discount implied by CIRP?
What is the depreciation tax shield : Calculate the EBIT. What is the depreciation tax shield?
Produces coats and jackets for seattle market : Winter Tyme, Inc., produces coats and jackets for the Seattle market. What is the project's start-up cost, the year 0 cash flow from assets?
What would be the cost today of this hedging strategy : What would be the cost today of this hedging strategy? What is the minimum dollar revenue that UUU will receive if they hedge with options?
What is the after-tax cash flow from the sale of asset : If the relevant tax rate is 33 percent, what is the after-tax cash flow from the sale of this asset?
What is the current yield or cost of the preferred stock : What is the current yield or cost of the preferred stock?
Considering building plant to produce snow tires : Winter Tyme, Inc., is considering building a plant to produce snow tires. If the tax rate is 33 percent, what is the OCF for this project?
Define anova and regression analysis : According to the Capital Asset Pricing Model (CAPM), Define ANOVA and Regression Analysis.
Sum of money grow to some specified amount : We sometimes need to find how long it will take a sum of money (or anything else) to grow to some specified amount.

Reviews

Write a Review

Financial Management Questions & Answers

  Security analysts expected return on two stocks

Consider the following table, which gives a security analyst's expected return on two stocks for two particular market returns: What are the betas of the two stocks? What is the expected rate of return on each stock if the market return is equally li..

  Uses Dutch auction IPO versus traditional IPO

Mark Sexton and Todd Story have been discussing the future of S&S Air. The company has been experiencing fast growth, and the two see only clear skies in the company's future. At the end of the discussion, Mark asks Renata about the Dutch auction IPO..

  Firm net capital spending-firm reduced net working capital

The firm’s net capital spending for 2016 was $1,070,000, and the firm reduced its net working capital investment by $136,000.

  Why there may be discrepancy between the big mac index

Explain why there may be a discrepancy between the Big Mac Index based on the exchange rate and the actual price of a Big Mac.

  What is the smallest expected loss for this portfolio

You are constructing a portfolio of two assets, Asset A and Asset B. The expected returns of the assets are 8 percent and 13 percent, respectively. The standard deviations of the assets are 30 percent and 38 percent, respectively. What is the smalles..

  What was standard deviation of the returns over this period

What was the arithmetic average return on the stock over this five-year period? What was the standard deviation of the returns over this period?

  What is the firm return on invested capital

Assume that you have just been hired as business manager of Campus Deli (CD), which is located adjacent to the campus. Sales were $1,100,000 last year, variable costs were 60% of sales, and fixed costs were $40,000. What is operating leverage, and ho..

  What is the yield to call for these bonds

Bob plans to purchase a callable Bond of general electric. The bond is 20 year to maturity, carry 10.5% annual coupon, paid semi annually, and have $1000 par value. The bond is selling now for $1,187.40 each. The bond can be called back in 5 years at..

  Calculation of wacc for common stock-preferred stock-bonds

Pumpkin Pie Industries has 5 million shares of common stock outstanding, 1 million shares of preferred stock outstanding, and 10 thousand bonds. If the common shares are selling for $50 per share, the preferred shares are selling for $31 per share, a..

  Calculate the net present value for each project

Calculate the net present value for each project. Does the new assumption change the investment decision?

  What is the target stock price in one year

Summers Corp. currently has an EPS of $6.06, and the benchmark PE for the company is 19. What is the target stock price in one year?

  Chocolate and more offers bond with coupon rate

Chocolate and more offers a bond with a coupon rate of 6 percent, semi-annual payments, and a yield to maturity of 7.73 percent. the bonds mature in 9 years. What is the market price of a 1,000 face value bond?

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