What is the after tax salvage value

Assignment Help Financial Management

Reference no: EM131059068

Your firm needs a machine which costs $260,000, and requires $41,000 in maintenance for each year of its 5 year life. After 3 years, this machine will be replaced. The machine falls into the MACRS 5-year class life category. Assume a tax rate of 30% and a discount rate of 15%. If this machine can be sold for $26,000 at the end of year 5, what is the after tax salvage value?

Reference no: EM131059068

Questions Cloud

Water filtration system to assist in circuit board : Aerotron Electronics is considering purchasing a water filtration system to assist in circuit board manufacturing. The system costs $40,000. It has an expected life of 7 years, at which time its salvage value will be $7,500. hat is the IRR of this in..

Truck is the best example of sunk cost : Valley Forge and Metal purchased a truck five years ago for local deliveries. Which one of the following costs related to this truck is the best example of a sunk cost? Assume the truck has a usable life of eight years.

Maximum allowable discounted payback period : Compute the discounted payback statistic for Project C if the appropriate cost of capital is 6 percent and the maximum allowable discounted payback period is three years. Discounted payback period years Should the project be accepted or rejected? Rej..

Failure to make wage adjustment consistent : Does the company’s failure to make a wage adjustment consistent with past practice on July 1, 2002 constitute a violation of the employer’s duty to bargain in good faith? Explain your reasoning. If an employer were found guilty of bad-faith bargainin..

What is the after tax salvage value : Your firm needs a machine which costs $260,000, and requires $41,000 in maintenance for each year of its 5 year life. After 3 years, this machine will be replaced. The machine falls into the MACRS 5-year class life category. Assume a tax rate of 30% ..

Correlation coefficient between the returns of two stocks : The covariance of the returns between Willow Sock and Sky Diamond Stock is 0.0790. The variance of Willow is 0.1860, and the variance of Sky Diamond is 0.1460. What is the correlation coefficient between the returns of the two stocks?

What is the amount of total taxable gifts : Lance has two adult children from a previous marriage. He has gifted them money for the past three years and his wife has consented to split the gifts each year. Lance made gifts to his children as follows: 2013: Gifts of $60,000 to each child 2014: ..

What was the consequence of this reverse gift : Lois gifted stock to her dying husband, Bradley, worth $500,000. Her basis in this stock was $200,000. Bradley's Will bequeathed all of his property to Lois. Assume Bradley died two years after receiving the stock. What was the consequence of this re..

Evaluate the proposed acquisition of new special-cash flows : You have been asked by the president of your company to evaluate the proposed acquisition of a new special-purpose truck for $60,000. The truck falls into the MACRS 3-year class, and it will be sold after three years for $20,300. What will the cash f..

User Account

All Pages