What is the terminal cash flow for year three

Assignment Help Financial Management

Reference no: EM131352558

You must evaluate the purchase of a proposed spectrometer for the R&D department. The base price is $140,000, and it would cost another $30,000 to modify the equipment for special use by the firm. The equipment falls into the MACRS 3-year class and would be sold after 3 years for $60,000. The applicable depreciation rates are 33%, 45%, 15%, and 7%, as discussed in Appendix 12A. The equipment would require an $8,000 increase in net operating working capital (spare parts inventory). The project would have no effect on revenues, but it should save the firm $50,000 per year in before-tax labor costs. The firm’s marginal federal-plus-state tax rate is 40%.

1: What is the operating cash flow for year 3?

2: What is the terminal cash flow for year 3?

3: What is the projects NPV?

4: What is the IRR

5: What is the MIRR?

Reference no: EM131352558

Questions Cloud

Should continuing nursing education be mandatory for nurse : NRS-440V:1.Impact on competency. 2.Impact on knowledge and attitudes. 3.Relationship to professional certification. 4.Relationship to ANA Scope and Standards of Practice. 5.Relationship to ANA Code of Ethics.Take a position with your CLC group: Sh..

Taxpayer could claim deductions for depreciation : Indicate whether a taxpayer could claim deductions for depreciation or amortization of the following property: Land used in the taxpayer’s farming business. A mobile home that the taxpayer initially purchased and used while he was in college and this..

Calculate the adiabatic flame temperatures of methane-air : Using the major-minor species model, calculate the adiabatic flame temperatures of methane-air mixtures at 1 atm pressure, with initial temperature of 298.15 K and φ = 0.6 and 0.8.

Plasma glucose levels as glucagon : During exercise, epinephrine and norepinephrine are released from the adrenal medulla. Epinephrine and norepinephrine have the same effect on plasma glucose levels as glucagon. Explain how epinephrine and norepinephrine affect plasma glucose and w..

What is the terminal cash flow for year three : You must evaluate the purchase of a proposed spectrometer for the R&D department. The base price is $140,000, and it would cost another $30,000 to modify the equipment for special use by the firm. What is the operating cash flow for year 3? What is t..

What were different type of financial institutions discussed : FIN 370- What were the different types of financial institutions discussed in the various videos on Lynda.com. How many different types of these institutions have you had your money in or worked with?

Calculate and the adiabatic flame temperature tad : Repeat (b), but use air instead of O2 as the oxidizer. What can you say about the differences in the answers here as compared with those in (b)?

Discuss about the nursing leadership and management : NRS-451V:Describe how alignment between the values of an organization and the values of the nurse impact nurse engagement and patient outcomes.Discuss how an individual can use effective communication techniques to overcome workplace challenges, e..

Earnings after taxes under this financing plan : Lear Inc. has $900,000 in current assets, $400,000 of which are considered permanent current assets. In addition, the firm has $700,000 invested in fixed assets. The balance will be financed with short-term financing, which currently costs 5 percent...

User Account

All Pages