What is the aftertax cash flow from the sale of asset

Assignment Help Financial Management
Reference no: EM131967553

Question: Consider an asset that costs $343,200 and is depreciated straight-line to zero over its 6-year ta...

Consider an asset that costs $343,200 and is depreciated straight-line to zero over its 6-year tax life. The asset is to be used in a 3-year project; at the end of the project, the asset can be sold for $42,900.

Required :

If the relevant tax rate is 31 percent, what is the aftertax cash flow from the sale of this asset? (Do not round your intermediate calculations.)

Reference no: EM131967553

Questions Cloud

What arbitrage opportunities exist : If the market value of a put option on the same underlying, having the same strike and expiring in 6 months is $3.5, what arbitrage opportunities exist?
Old production line in evaluating the rebuilding plan : How should the company treat the cost of $500,000 of the old production line in evaluating the rebuilding plan?
Hat coupon rate do you need to set : If you want to issue new 10-year coupon bonds at par, what coupon rate do you need to set?
Sales using regression to estimate trend : What would be the forecast for next year’s sales using regression to estimate a trend?
What is the aftertax cash flow from the sale of asset : If the relevant tax rate is 31 percent, what is the aftertax cash flow from the sale of this asset?
The appropriate time to harvest the entire crop of shrimp : Describe how you would determine the appropriate time to harvest the entire crop of shrimp.
Cash flow in the final year of an investment : What is the undiscounted cash flow in the final year of an investment, assuming: 10,000 13) after-tax cash flows from operations,
Best indicator that acquiring firm is good idea : Which one of these is the best indicator that acquiring a firm is a good idea?
What is approximate yield to maturity : The annual interest payment, paid once per year, is $80. What is the approximate yield to maturity?

Reviews

Write a Review

Financial Management Questions & Answers

  What is value of the common stock-common stock valuation

(Common stock valuation) Gilliand Motor, Inc., paid a $4.39 dividend last year. If Gilliand’s return on equity is 19 percent, and its retention rate is 28 percent, what is the value of the common stock if the investors require a rate of return of 18 ..

  Drugs annually in its dialysis treatments

Although not shown on Table 1, the Center uses (sells) $800,000 of drugs annually in its dialysis treatments, which cost the hospital (pharmacy) $400,000. The $400,000 profit on these drugs accrues to the pharmacy, which records $800,000 of revenues ..

  What is the return on the portfolio

What is the return on the following portfolio?

  Describe the profit maximisation concept

Describe the ‘profit maximisation’ concept and discuss why a finance manager who focuses on this approach will not likely to achieve the firm’s fundamental financial objective. Explain how the concept of risk aversion may relate to investment decisio..

  Uses the proceeds to repurchase shares

Meyer & Co. expects its EBIT to be $66,000 every year forever. The firm can borrow at 5 percent. Meyer currently has no debt, and its cost of equity is 11 percent. If the tax rate is 35 percent, what is the value of the firm? What will the value be i..

  Capital asset pricing model security market line

Apply the Capital Asset Pricing Model (CAPM) Security Market Line to estimate the required return on these two stocks.

  What is your incremental cash flow from selling the machine

You purchased a machine for $1.06 million three years ago and have been applying straight-line depreciation to zero for a seven-year life. Your tax rate is 35%. If you sell the machine today (after three years of depreciation) for $779,000, what is y..

  Meaning of the different determinants of the z score

The z score is 3. explicate the meaning of the different determinants of the z score. will this company default?

  What day does this stock start trading ex dividend

Interior Investors, Inc. has declared a cash dividend of $1.20 to be paid to holders of record on Wednesday, June 19th. What is the last day an investor can purchase XYZ stock and still receive the dividend? On what day does this stock start trading ..

  Calculate the payback period for the machine

A machine can be purchased for $10,500 including transportation charges, but installation costs will require $1,500 more. The machine is expected to last four years and produce annual cash revenues of $6,000. Determine the relevant after-tax cash flo..

  New three-year expansion project

Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $3 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life.

  Income tax on economic benefit for coverage over what amount

An employee can name a charity as the sole beneficiary of group term life insurance and avoid any income tax on the economic benefit for coverage over what amount?

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