What will be the after-tax cash flow of this sale

Assignment Help Financial Management
Reference no: EM131057926

Suppose you sell a fixed asset for $123,000 when its book value is $143,000. If your company’s marginal tax rate is 40 percent, what will be the effect on cash flows of this sale (i.e., what will be the after-tax cash flow of this sale)?

ATCF $

Reference no: EM131057926

Questions Cloud

Discuss an advantage and a disadvantage of such an approach : Discuss an advantage and a disadvantage of such an approach.
Evaluate the proposed acquisition-what will the cash flows : You have been asked by the president of your company to evaluate the proposed acquisition of a new special-purpose truck for $70,000. The truck falls into the MACRS 3-year class, and it will be sold after three years for $20,800. The firm’s marginal ..
What is the after-tax salvage value : Your firm needs a computerized machine tool lathe which costs $52,000 and requires $12,200 in maintenance for each year of its 3-year life. After three years, this machine will be replaced. what is the after-tax salvage value?
Does this cause a cycle in the authorization graph : Does this cause a cycle in the authorization graph
What will be the after-tax cash flow of this sale : Suppose you sell a fixed asset for $123,000 when its book value is $143,000. If your company’s marginal tax rate is 40 percent, what will be the effect on cash flows of this sale (i.e., what will be the after-tax cash flow of this sale)?
Shareholders equity after the cash dividend payment : TIM Corporation had 2,200,000 shares outstanding at the beginning of the year, with a common stock book value of $7,150,000. TM’s retained earnings at the start of the year were $2,000,000. Determine retained earnings and total shareholders’ equity a..
Calculate the dividends paid and external equity financing : Knox Corp. has a debt to equity ratio of 3 and new investments would cost $40 million this year. The firm expects earnings of $15 million this year. Calculate the debt and equity financing amount needed for the new investments if the firm wants to ma..
Increases the net present value of project : Which one of the following increases the net present value of a project? an increase in the required rate of return. an increase in the initial capital requirement. a deferment of some cash inflows until a later year. an increase in the aftertax salv..
Number of patients to quadruple : A non-resolved case of epidemic will have a continuous growth of statistics based on the present amount. If a number of SARS patients has been left untreated for one day, the number of patients will double. How long will it take for the number of ..

Reviews

Write a Review

Financial Management Questions & Answers

  The expected inflation rate

If the nominal interest rate is 8% and the risk-free rate is 3%, the expected inflation rate must be

  Issue more shares and use the proceeds to lower its debt

Select the choice below that will make the quick ratio go up: Firm XYZ will issue more shares and use the proceeds to lower its debt. Suppose that this does not change operating income, interest rates, tax rates, or total assets. Which statement is m..

  Describe the operating cycle and the cash cycle

Explain the connection between a firm’s accounting-based profitability and its cash cycle? Describe the operating cycle and the cash cycle. What are the differences?

  What is the value of the leveraged firm

Tar Heel Healthcare has no debt financing and has a firm value of $20 million. It has a corporate tax rate of 34 percent. The firm's investors are estimated to have marginal tax rates of 31 percent on interest income and 28 percent on stock income. A..

  Considering investing in a new product

SI Inc. is considering investing in a new product named Z90. There is a 50% chance that the product will be a success, which then generates $110,000 cash inflow each year for the next 5 years. There is a 50% chance that the product will fail, which t..

  Bond equivalent and discount yields

The treasurer of a large corporation wants to invest $33 million in excess short-term cash in a particular money market investment. The prospectus quotes the instrument at a true yield of 4.21 percent; that is, the EAR for this investment is 4.21 per..

  Find weights of debt and equity using the debt-equity ratio

Tattered Books has a WACC of 13.6 percent and a cost of equity of 16.1 percent. What is the after-tax cost of debt if the debt-equity ratio is 0.40? (Hint: First find the weights of debt and equity using the debt-equity ratio and then plug them into ..

  Coupon rate-what is the current bond price

Great Wall Pizzeria issued 14-year bonds one year ago at a coupon rate of 8.4 percent. If the YTM on these bonds is 9.4 percent, what is the current bond price?

  Quantitative factors best predict bond defaults

Bond rating agencies have invested significant sums of money in an effort to determine which quantitative and non quantitative factors best predict bond defaults. Furthermore, some of the raters invest time and money to meet privately with corporate ..

  Short-term cash in particular money market investment

The treasurer of a large corporation wants to invest $12 million in excess short-term cash in a particular money market investment. The prospectus quotes the instrument at a true yield of 6.28 percent; that is, the EAR for this investment is 6.28 per..

  Initial cost probability net revenue probability

A project has a life of 10 years, and no salvage value. The firm uses an interest rate of 12% to evaluate projects. This project has an uncertain initial cost and net revenue as below. A. Joint probability distribution for cost and net revenue B.

  Estimate the first-year net operating cash flow

Eisenhower Communications is trying to estimate the first-year net operating cash flow (at Year 1) for a proposed project. The financial staff has collected the following information on the project: What is the project's operating cash flow for the f..

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