What will the cash flows for project be

Assignment Help Financial Management
Reference no: EM131543889

Mom’s Cookies, Inc., is considering the purchase of a new cookie oven. The original cost of the old oven was $46,000; it is now five years old, and it has a current market value of $21,500. The old oven is being depreciated over a 10-year life toward a zero estimated salvage value on a straight-line basis, resulting in a current book value of $23,000 and an annual depreciation expense of $4,600. The old oven can be used for six more years but has no market value after its depreciable life is over. Management is contemplating the purchase of a new oven whose cost is $25,000 and whose estimated salvage value is zero. Expected before-tax cash savings from the new oven are $3,000 a year over its full MACRS depreciable life. Depreciation is computed using MACRS over a 5-year life, and the cost of capital is 10 percent. Assume a 34 percent tax rate. What will the cash flows for this project be? (Note that the $46,000 cost of the old oven is depreciated over ten years at $4,600 per year. The half-year convention is not used for the old oven. Negative amounts should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places.)

Reference no: EM131543889

Questions Cloud

Define values morals and ethics in context of obligation : Using the reading and the questionnaire, write a paper of 750-1,000 words in which you describe your professional moral compass.
Determining the safety-net program : Medicaid has often been considered a safety-net program, because it has typically covered children, pregnant women, low-income mothers
Challenges of implementing strategy : What are the keys to and challenges of implementing strategy? How can companies overcome the challenges?
How the life-span perspective may provide : Explain how the life-span perspective may provide a way of better understanding the research reviewed
What will the cash flows for project be : Mom’s Cookies, Inc., is considering the purchase of a new cookie oven. What will the cash flows for this project be?
Justiciability versus non-justiciability disputes : lawsuit where the parties are not actually in disagreement, but are cooperating to steer the court towards some agreed-upon conclusion.
What is the ethical dilemma here : A 6-year-old develops a high fever accompanied by violent vomiting and convulsions while at school. The child is rushed to a nearby hospital.
American rule for attorney fees : After reading the facts of each case, determine whether the Court should permit an exception to the American Rule for attorney fees or not.
Determine the cash flows associated with the different truck : Determine the cash flows associated with the different trucks for each year of the project. Determine which tractor you would recommend that Steve purchase.

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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