What will the cash flows for the project be

Reference no: EM131935605

Question: 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 $19,300. Use of the truck will require an increase in NWC (spare parts inventory) of $1,300. The truck will have no effect on revenues, but it is expected to save the firm $23,900 per year in before-tax operating costs, mainly labor. The firm's marginal tax rate is 35 percent. What will the cash flows for this project be? (Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places.)

Reference no: EM131935605

Questions Cloud

Which assertion about stock gamma is true : Which assertion about stocks gamma, Hotel, India, and Juliet is true if PH > PG > 0 and PI > PJ > 0? All 4 stocks pay annual dividends with the next dividend.

What will be the annual payment for machine : The west bend community hospital purchased an MRI machine for $50 million, using a 10 year loan at 10.5% interest. What will be the annual payment for machine.

Calculate financial ratio for assessing fiscal effort : You have been asked to perform financial condition ratio analyses for two communities, Thriftyville and Myopica, based on data culled from each of their CAFRs.

Evaluate proposed acquisition of a new special-purpose truck : You have been asked by the president of your company to evaluate the proposed acquisition of a new special-purpose truck for $110,000.

What will the cash flows for the project be : You have been asked by the president of your company to evaluate the proposed acquisition of a new special-purpose truck for $70,000.

What are the dimensions of the bcg matrix : What are the dimensions of the BCG matrix? What is the cost of equity from retained earnings based on the DCF approach?

What is the projected net present value of this project : Company x has a capital structure which is based on 60 percent debt, What is the projected net present value of this project?

What is the component cost of debt for use in the wacc : What is the component cost of debt for use in the WACC calculation?

The range of payoffs from the unhedged position : Your diagram should show the range of payoffs from the unhedged position, the hedge instrument and the net position.

User Account

All Pages