What is the initial outlay required to fund project

Reference no: EM13268305

You have been asked by the president of your company to evaluate the proposed acquisition of a new special-purpose truck. since you are not an expert on industrial vehicles, you hire a consulting firm to make recommendations. the consultant charged you $1,500 and recommended the purchase of a model CP8 truck. the trucks basic price is $40,000, and it will cost another 10000 to modify it for special use by your firm. the truck will be depreciated using IRS guidelines that require depreciation expense to 33% of initial depreciation value in year one, 45% of the initial depreciable value in year two, and 15% of the initial depreciable value in year three. the company expects to sell the new truck after three years for $20,000. use of the truck will require an increase in the companys net working capital of $2,000 but this $2,000 may be recovered at the end of year three. the truck will have no effect on revenues, but it is expected to save the firm $25,000 per year in before-tax operating costs, mainly labor. the firms marginal tax rate is 40%. what is the initial outlay required to fund this project?

Reference no: EM13268305

Questions Cloud

What is the price of a treasury strips with a face value : What is the price of a treasury STRIPS with a face value of $100 that matures in ten years and has a yield to maturity of 3.5%.

Write a simple awk statement that finds out the total sample : Write a simple awk statement that finds out the total number of samples of items that are gold, the total weight of these gold items and the total value of these gold items based on Monday September 30th price for GOLD and the difference in value

What is thoman cash flow per share : Thomans preferred stock dividend is $15,000. Its weighted-average common shares outstanding were 250,000. What is Thoman cash flow per share?

What is the ending balance of retained earnings for engstrom : Engstrom Company began fiscal 2013 with a $40,000 balance in Retained Earnings. During 2013, its net income was $167,890 and it declared and paid dividends of $50,000. What is the ending balance of Retained Earnings for Engstrom?

What is the initial outlay required to fund project : You have been asked by the president of your company to evaluate the proposed acquisition of a new special-purpose truck. since you are not an expert on industrial vehicles, you hire a consulting firm to make recommendations.

Design op amp circuit to produce output vout : design op amp circuit to produce output vout which is related to inputs v1, v2 and v3 by expression vout= -(3v1+5v2+8v3). assume max permitted resistor value= 200k.

Explain a fraction of the speed of light : what speed would this quasar seem to be receding from us? Give your answer in km/s and as a fraction of the speed of light.

Calculate the required pre-tax earnings to cover debt : Calculate the required pre-tax earnings to cover debt and preferred stock obligations, before and after the recapitalization?

Estimate tplh and tphl for this arrangement as measured : An NMOS pass-transistor switch with W/L= 1.2 um / 0.8 um. used in a 3.3-V system for which Vt0 = 0.8 V,(lambda)= 0.5 V^(1/2), 2(phi)f= 0.6 V , unCox = 3upCox = 75 uA/V^2, drives a 100-fF load capacitance at the input of a matched standard CMOS inv..

User Account

All Pages