What is the net after-tax cash inflow in year

Assignment Help Managerial Accounting
Reference no: EM132845990

Question - Pique Corporation wants to purchase a new machine for $286,000. Management predicts that the machine can produce sales of $186,000 each year for the next 8 years. Expenses are expected to include direct materials, direct labor, and factory overhead (excluding depreciation) totaling $80,000 per year. The firm uses straight-line depreciation with no residual value for all depreciable assets. Pique's combined income tax rate is 30%. Management requires a minimum after-tax rate of return of 12% on all investments. What is the net after-tax cash inflow in Year 1 from the investment?

Reference no: EM132845990

Questions Cloud

Prepare the correcting entries : At Raymond Company, the following errors were discovered after the transactions had been journalized and posted. Prepare the correcting entries
What is the return on equity : Lee Sun's has sales of $3,850, total assets of $3,550, and a profit margin of 4 percent. The firm has a total debt ratio of 40 percent. What is the return
What is the prepaid benefit cost at the year-end : Milky Way Company had the following balances relating to the defined benefit plan at year-end: What is the prepaid benefit cost at the year-end
How much must you invest at interest : How much must you invest at 12% interest, compounding quarterly, in 2 points order to see your investment grow to P5,000 in 27 months
What is the net after-tax cash inflow in year : Management requires a minimum after-tax rate of return of 12% on all investments. What is the net after-tax cash inflow in Year 1 from the investment
What was clinton income tax expense : No valuation account was deemed necessary for the deferred tax asset as of December 31, 2015. What was Clinton's income tax expense in 2016
Complete the current tax worksheets of abc ltd : Accumulated depreciation on plant for tax purposes is $300 000 on 30 June 2020 and $150 000 on 30 June 2019. Complete the current tax worksheets of ABC Ltd
What is the effective annual rate of interest on this loan : When Charles complained about the high interest rate given their long friendship, What is the effective annual rate of interest on this loan
Determine the average rate of return on the equipment : Average Rate of Return-Cost Savings - Determine the average rate of return on the equipment, giving effect to straight-line depreciation on the investment

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Calculate the total variable support cost variance

Calculate the total variable support cost variance and direct material quantity variance and variable support efficiency variance.

  Find what is the break-even point in units

If fixed costs are $48,000 and the contribution margin ratio is 40% for a product that sells for $20, what is the break-even point in units?

  How would the costs be considered in product costing

Define What types of SG&A costs would a Beverage company incur? And How would these costs be considered in product costing?

  Prepare the general journal entry for september

Treasury stock at the going market rate of $22 per share. Use this information to prepare the General Journal entry (without explanation) for September 1.

  Differentiate among the major forms of business organization

Differentiate among the major forms of business organization and describe what you consider to be the top 2 advantages and disadvantages of each form.

  How can events in job-order costing system affect financial

Compare and contrast job-order and process costing systems. How can events in a job-order costing system affect financial statements?

  Which payout option should Alex select

Receive $100,000,000 in cash today. Assuming that the effective rate of interest is 7%, which payout option should Alex select

  What the profitability index for the investment is

What The profitability index for the investment is? The management of Tony Corporation is considering the purchase of a new machine costing $400,000

  What the challenge is for easy part of a horizontal analysis

The calculations are the easy part of a horizontal analysis, What the challenge is? both gathering the data and interpreting the results.

  How do construct two contribution format income statements

How do Construct two contribution format income statements, one assuming that operations are not automated and one assuming that they are.

  Prepare a budgeted income statement

Prepare a budgeted income statement for each of the above three alternative plans and identify the plan that has the most beneficial effect on Flexs

  Compute net incremental cost the component

Paxton Company can produce a component of its product that incurs, Compute the net incremental cost or savings of buying the component.

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