What will the cash flows for this project be

Assignment Help Corporate Finance
Reference no: EM13683169

Mom''s Cookies Inc. is considering the purchase of a new cookie oven. The original cost of the old oven was $30,000; it is now 5 years old, and it has a current market value of $13,333.33.

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 $15,000 and an annual depreciation expense of $3,000. The old oven can be used for 6 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 $4,000 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 40 percent tax rate. What will the cash flows for this project be?

Reference no: EM13683169

Questions Cloud

The same time a voltmeter with internal resistance : A 6.0 V battery is connected to two 7.90 kilo-Ohm resistors in series. An ammeter of internal resistance 0.530 Ohm gauges the current and at the same time a voltmeter with internal resistance 16.5 kilo-Ohm gauges the voltage across one of the 7.90 ki..
The speed of a wave on a violin : The speed of a wave on a violin. A string is 288 m/s and on the G string is 128 m/s. Use the information to decide the ratio of mass per unit length of the strings. What assumptions were made?
What is the charge on negative electrode : A parallel-plate capacitor is formed from two 1.0cm×1.0cm electrodes spaced 2.6mm apart. The electric field strength inside the capacitor is 1.0×106 N/C. What is the charge (in nC) on negative electrode? What is the charge (in nC) on positive electro..
Impact of globalization on international accounting harmoniz : Impact of Globalization on international Accounting Harmonization
What will the cash flows for this project be : Depreciation is computed using MACRS over a 5-year life, and the cost of capital is 10 percent - Assume a 40 percent tax rate. What will the cash flows for this project be?
A final and overall review of audit evidence : A final and overall review of audit evidence and the final statements of a client by the engagement partner,
How much would be left from the typical initial : Let's say we have a drug Hexadrol. The biological half life is 36 hours. The person is taking 2mg three times a day. Total 6mg per day. How much would be left from the typical initial dose until just before taking the next dose. Decide how much would..
Energy is transferred in solids by conduction : Energy is transferred in solids by conduction, which means that. Heat travels in both directions. Heat travels from the cooler object to the hotter object. Heat does not travel between objects of different temperatures.
What are the clinics expected total costs : What is the clinic's underlying cost structure and what are the clinic's expected total costs and what are the clinic's estimated total costs at 7,500 visits? At 12,500 visits?

Reviews

Write a Review

Corporate Finance Questions & Answers

  Eastern electronicseastern electronics headquartered out of

eastern electronicseastern electronics headquartered out of berlin germany was a cottage industry that prospered after

  1 missing trading ltd purchased a business delivery

1 missing trading ltd purchased a business delivery vehicle on the 1 of january 2009 for r120 000. calculate the

  A united states company x has contracted to provide a

a united states company x has contracted to provide a service to a european company z european company uses the euro

  Question 1 companies and business planningfwpl acquired the

question 1 companies and business planningfwpl acquired the winery business in 1981 from francesca and angelo galli.

  Explain sensitivity analysis

What role does this type of analysis play in your work environment or in your home environment and also explain  sensitivity analysis.

  Find the maximum amount to meet payment restriction

You are planning to buy of new car. You have negotiated with the salesperson at dealership & you can buy the vehicle for $30,000.

  Financial risk ethier enterprise has an unlevered beta of

ethier enterprise has an unlevered beta of 1.1. ethier is financed with 45 debt and has a levered beta of 1.2. if the

  The capmolter inc is starting its risk management program

the capmolter inc. is starting its risk management program for the company and has asked for your help in determining

  Analysis of financial statement considering ratio analysis

analysis of financial statement considering ratio analysis and giving recommendation.submit a two-page 600 to 700 word

  Reasonable way to manage corporations

Discuss whether this assertion is a reasonable way to manage corporations, discuss any viable alternatives, and come to a conclusion - The Semi-strong Efficient Market Hypothesis and Stock-valuation Models

  Define budget deficit

Discuss and explain why a budget deficit in a given year when the unemployment rate is 10% could be, in fact, a surplus in that year if the unemployment value were 5%.

  Determine the internal rate of return for the project

Determine the internal rate of return for the project and determine the reinvested rate of return for the project.

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