What is the estimated net cash flow for end of year 1

Assignment Help Financial Management

Reference no: EM131903193

1.) The Have A Wonderful Summer Company is considering a new computer system for the company that will cost $200,000. It is estimated that operating profits (before taxes) will increase by $80,000 per year for 5 years if the system is purchased.

The asset falls into the 5-year MACRS category (20%, 32%, 19%, 12%, 12%, 5% for years 1 through 6 respectively). Tax rate of the company is 40%.

a) In the capital budgeting analysis, what is the estimated net cash flow for end of Year 1?

b) End of Year 2?

2.)Using the information in the previous question, what are the operating net cash flows for Years 3, 4, and 5?

SHOW ALL WORK-STEP BY STEP

NOT IN A CHART- I REPEAT, NOT IN A CHART for each year's cash flows

Reference no: EM131903193

Questions Cloud

Prepare a powerpoint presentation for college students : You will create a PowerPoint presentation for college students,taking everything that you have learned from Parts 1 -2 to teach students 5 essential strategies.

What is the present value of his consulting contract : How much will you have after 18 years? but calculate your final answer using the formula and financial calculator methods.

Is the prudential regulation authority effective : Is the Prudential Regulation Authority ( PRA ) effective ? (Have they improved the sound and safety of banks ? And maybe some examples)

What is the ltw : What is the LTW? The payments are made at the end of performance. Do not consider tax and depreciation. Use a 10% per year interest rate.

What is the estimated net cash flow for end of year 1 : )Using the information in the previous question, what are the operating net cash flows for Years 3, 4, and 5?

What is the ships lifetime worth : The purchase costs of cargo ships are estimated to be $800 per ton. If the shipping company uses MARR of 6%, what is the ship's lifetime worth?

Write an philosophy essay on utilitarianism : I need to write an philosophy essay out Peter Singer on utilitarianism, happiness and ultimate good.

What is the equilibrium price and quantity for the escalade : Intermediate Microeconomics Assignment - Consider the demand for a Cadillac Escalade. What is the equilibrium price and quantity for the Escalade

What is the lifetime worth of the machine : If the machine lasts five years and has a removal cost of $1,000 with no salvage value, what is the lifetime worth of this machine?

User Account

All Pages