What will the cash flows for this project be during year 3

Assignment Help Finance Basics
Reference no: EM13283534

You have been asked by the president of your company to evaluate the proposed acquisition of a new special-purpose truck for 60,000. The truck falls into the MACRS 3 year class, and it will be sold after three years for 14,000. Use of the truck will require an increase in NWC of 3,000. The truck will have no effect on revenues but it is accpected to save the firm 20,000 per year in before -tax operating cost. The firms marginal tax rate is 40%. What will the cash flows for this project be during year 3?

Reference no: EM13283534

Questions Cloud

Evaluation stage-analysis stage-revision stage : Evaluation stage, Analysis stage, Revision stage. Describe the purpose and methodologies process for evaluating and revising a public policy (why is this process important?)
Low airfare without compromising service and comfort : Describe your unique selling proposition (USP). Next, explain the key aspects of your business, products, or services that make them unique when compared to your competition (e.g., Southwest Airlines' USP is providing customers with low airfare..
Find how wide is the slit : Light from a laser beam with a wavelength of 600 nm passes through a narrow single slit and observed on a screen 1.5 m behind the slit. How wide is the slit
Find the work done by the field on the electron : A uniform electric field of magnitude 380 N/C pointing in the positive x-direction acts on an electron, which is initially at rest. The electron has moved 2.60 cm. What is the work done by the field on the electron
What will the cash flows for this project be during year 3 : The firms marginal tax rate is 40%. What will the cash flows for this project be during year 3?
Forces compelling a transformation of the health care : Describe the five forces compelling a transformation of the health care industry, and be able to identify the role Information Technology will play in achieving this.
Explain why is it referred to as a minority carrier equation : ∂Δnp/∂t = DN∂2Δnp/∂x^2 -Δnp/τn + GL is known as the minority carrier diffusion equation for electrons. (a) Why is it called a diffusion equation (b) Why is it referred to as a minority carrier equation
Explain a common by-product in this reaction is biphenyl : A common by-product in this reaction is biphenyl, which is generated through a coupling reaction of phenylmagnesium bromide with unreacted bromobenzene. Draw the structure of biphenyl.
Baby boomers in america are aging : Baby boomers in America are aging

Reviews

Write a Review

Finance Basics Questions & Answers

  Estimate their prices a year from now

Victoria bond is a premium bond with 8% coupon. Houston bond is a 4 % coupon bond currently selling at a discount. Both bonds make annual payments and have a yield to maturity (YTM) of 6%, and have 5 years till maturity.

  Determine company cost of equity

Chandeliers Corp. has no debt but can borrow at 7.4%. The firm's WACC is currently 9.2%, and the tax rate is 35%.

  Perform calculations

For those Assignments in this course that require you to perform calculations you must: Create an Excel spreadsheet containing the information provided.  Template in Word is provided. Show all your work.

  What is the amount of the next semi-annual coupon payment

The Six-month U.S. dollar LIBOR is currently 4.375%; your firm issued floating-rate notes indexed to six-month U.S. dollar LIBOR plus 50 basis points. What is the amount of the next semi-annual coupon payment per U.S. $1,000 of face value?

  Calculate the approximate yield

Suppose you've purchased 25 year, 9%, $1000 par callable bond with 19 years remaining till maturity and 4 years till the first call. If the call price is equal to par plus one year's interest and market price is $1,050, what is the appropriate app..

  Finance theory based questions

Determine the two major sources of spontaneous short-term financing for a firm and explain how do their balances behave relative to the firm's sales?

  How might pam and josh use mutual funds

Finally, they talk with various financial advisers and other investors to gather additional information.

  How much will les have in his retirement account

If he is employed by this firm for 30 more years and earns an average of 10.5 percent on his retirement savings, how much will Les have in his retirement account 30 years from now?

  Should the firm undertake the healthy bottled water project

Should the firm undertake the healthy bottled water project? As part of your analysis, include a sensitivity analysis for sales price, variable costs, fixed costs, and unit sales at plus or minus 10%, 20%, and 30% from the base case.

  Describing depreciated property and appreciated property

She creates a gift of depreciated property (adjusted basis exceeds fair market value) to Marsha, appreciated property (fair market value exceeds adjusted basis) to Jan.

  Prepare an income statement

The adjusted trial balance columns of the worksheet for Goode Corporation are as follows:

  What is the projects irr

You have now been tasked with providing a recommendation for the project based on the results of a Net Present Value Analysis. Assuming that the required rate of return is 15% and the initial cost of the machine is $3,500,000.

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