What will be cwc''s after-tax operating income

Reference no: EM131393967

Canadian Wilderness Company (CWC) just bought a machine that is expected to generate $25,000 in operating income before depreciation expenses each year. The machine, which has a depreciable basis equal to $60,000, falls into the MACRS 3-year class. What will be CWC's

(a) after-tax operating income and

(b) operating cash flow for both this year (Year 1) and three years from now (Year 3)? Assume that all sales and operating expenses, except depreciation, are cash. CWC's marginal tax rate is 40 percent.

Reference no: EM131393967

Questions Cloud

Which project(s) should ppp purchase : A 4 percent adjustment is made for high-risk projects, and a 2 percent adjustment is made for low-risk projects. Which project(s) should PPP purchase?

What are the annual supplemental operating cash flows : The project's depreciable basis is $840,000, and it will be depreciated on a straight-line basis to a book value equal to zero ($0) over its 10-year life. If the firm's marginal tax rate is 34 percent, what are the annual supplemental operating ca..

What after-tax net cash flow will western receive : If its marginal tax rate is 40 percent, what after-tax net cash flow will Western receive when the machine is sold in four years?

Explain how you will address jims recent performance issues : Explain how you will address Jim's recent performance issues. Suggest both constructive and positive feedback designed so that Jim will leave motivated to do his best.

What will be cwc''s after-tax operating income : Assume that all sales and operating expenses, except depreciation, are cash. CWC's marginal tax rate is 40 percent.

Describe any relevant variables-measures and statistical tes : The written research proposal will be created based on a narrowly defined aspect of the topic selected in Week One. A research proposal is a detailed plan for a specific study to be conducted at a future time. It is the document which potential re..

Evaluate a specific option for each capital project : Evaluate, rank, and recommend a specific option for each capital project according to beneficial value to the organization, using the evaluation tools NPV, payback, and IRR.

What is the optimal capital budget : If Tri-Q's marginal tax rate is 40 percent, what is the optimal capital budget?

What is its marginal cost of capital to raise needed funds : If Killer needs to raise $220,000 and it expects to generate $100,000 in retained earnings this year, what is its marginal cost of capital to raise the needed funds?

User Account

All Pages