What is the present value and will it affect companys taxes

Reference no: EM13239622

The company you work for has a high speed 5-axis milling machine which was purchased 5 years ago for $200,000 and has a 10 year life. This machine is currently idle and can be used to make a product designed by a research institute which requires at $10,000 license fee to use their design. Tooling costs $5000. Materials and consumables (cutting fluids, milling cutters, power, etc) are budgeted at $40 per product. Your company applies an overhead rate of 25% on all direct costs to cover indirect costs.

The market has changed since your company bought the machine; it now seems possible that it could be sold for as much as $20,000 5 years from now; what is the present value (i=4%)? Will this affect the company's taxes?

Reference no: EM13239622

Questions Cloud

What is strategy is most desirable from economic efficiency : Firms have tried a number of different strategies to reduce the negative effects of competition on their ability to earn economic profits. What is the strategy is most desirable from the economic efficiency and consumer well being

How the demand for a commodity is represented : Assume that demand for a commodity is represented by the equation P = 10 - 0.2 Q d, and supply by the equation P = 2 + 0.2 Qs where Qd and Q s are quantity demanded and quantity supplied, respectively, and P is the Price.

How industry price and output will approach the outcome : Assume the firms in an oligopoly produce a differentiated product and are initially colluding. If each firm begins to cheat (to increase sales) by underpricing the other firms, as the amount of cheating increases

Explain what is the absorbance of the resulting solution : a solution that contains 5.94 ppm iron(III) is treated with an appropriate excess of KSCN and is diluted to 50 ml. What is the absorbance of the resulting solution at 580 nm in a 2.5 cm cell

What is the present value and will it affect companys taxes : The market has changed since your company bought the machine; it now seems possible that it could be sold for as much as $20,000 5 years from now; what is the present value (i=4%) Will this affect the company's taxes

Explain the wavelength of maximum absorption : At 580 nm the wavelength of its maximum absorption, the complex FeSCN2+ has a molar absorptivity of 7X10^3 L cm-1 mol-1 calculate

What the previous manager could have done to keep his job : recently hired to replace the manager of the Roller Division at a major conveyor-manufacturing firm, despite the manager's strong external sales record. Roller manufacturing is relatively simple, requiring only labor and a machine that cuts and cr..

Calculate the resulting charge on capacitor c1 and c2 : Capacitors C1 = 6.03 ?F and C2 = 2.45 ?F are charged as a parallel combination across a 298 V battery, Calculate the resulting charge on capacitor C1 and C2

Explain the units for absorptivity where the path length : What are the units for absorptivity where the path length is given in centimeters and the concentration is expressed in. a. parts per million

User Account

All Pages