User Account

All Pages

What is the firm net initial investment for the new machine

Assignment Help Financial Accounting
Reference no: EM132709977

Johnson Products is considering purchasing a new milling machine that costs $1,000,000. The machine's installation and shipping costs will total $25,000. If accepted, the milling machine project will require an initial net working capital investment of $200,000.

Problem a. What is the firm's net initial investment (NINV) for the new machine?

Problem b. If Johnson Products plans to depreciate the machine on a straight-line method for 8 years, what will be its depreciation?

Problem c. The new machine is expected to earn for Johnson Products $350,000 per year (revenues-expense) for 8 years before depreciation and taxes. If the machine is depreciated on a straight-line basis for the 8-year period with no salvage value, and the tax rate is 40% what is the annual net cash flow?

Problem d. What is the terminal cash flow if the new machine has a salvage value of $100,000.

Reference no: EM132709977

Questions Cloud

Calculate each project payback period : Calculate each project's payback period, net present value (NPV), internal rate of return (IRR), modified internal rate of return (MIRR)
How much revenue to recognize and when : Believe that the company should follow, explaining the basis for your recommendation. Also describe how much revenue to recognize and when?
Find portfolio standard deviation : Your portfolio consists of two stocks. You have $2000 in stock A and $8000 in stock B. The returns for stock A have a standard deviation of 20% and the returns
What is the npv of the investment : Company XYZ invests $44,338 today with the hopes to return $48,308 in one year. If the cost of capital is 8%, what is the NPV of the investment?
What is the firm net initial investment for the new machine : If the machine is depreciated on a straight-line basis for the 8-year period with no salvage value, and the tax rate is 40% what is the annual net cash flow?
Present value of the depreciation tax shield : The firm's tax rate is 34%. The CCA rate is 20% (Class 8). What is the present value of the depreciation tax shield?
Conflict theory : Conflict theory suggests that the rich (powerful) make the rules and enforce them against the poor (powerless).
Prepare a completed Work in Process T-account : Prepare a completed Work in Process T-account including the beginning and ending balances and all debits and credits posted to the account
Which would generate the highest return after two years : If you had the option to invest $1,000 under the following options, which one would generate the highest return after two years?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd