What would be the after- tax cash flow from sale of asset

Assignment Help Financial Management
Reference no: EM132063960

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 MACRS Depreciation Rate 20.00% 32.00% 19.20% 1.52% 11.52% 5.76% A bakery invests $36000 in a light delivery truck. This was depreciated using the five- year MACRS schedule shown above. If the company sold it immediately after the end of year 2 for $25000, what would be the after- tax cash flow from the sale of this asset, given a tax rate of 40%?

Reference no: EM132063960

Questions Cloud

How much should you be prepared to pay for purchasing : You believe that next year Dong Lumination Company will pay dividend of $2 on its common stock. how much should you be prepared to pay for purchasing 100 shares
Associated equivalent annual cost of the machine : Determine the economic service life and the associated equivalent annual cost of the machine.
Explain the duties of trustees when paying death benefits : Discuss the ways in which death benefits can normally be paid by superannuation funds, and explain the duties of trustees when paying death benefits.
About the influence of the carry trade strategy : Can you give me a news about the influence of the carry trade strategy between the yen and the Australian dollar?
What would be the after- tax cash flow from sale of asset : If the company sold it immediately after the end of year 2 for $25000, what would be the after- tax cash flow from the sale of this asset, given a tax rate of 4
Hedging and speculating using financial derivatives : Explain briefly the difference between hedging and speculating using financial derivatives.
What is the NPV of MBMs expansion project : MBM Industries is an all-equity firm with 50 million shares outstanding. What is the NPV of MBM’s expansion project?
Monthly level payments the man has to repay for home loan : Calculate the monthly level payments the man has to repay for the home loan (e.g. find X). You are allowed to simply solve X by setting up the equation of value
Different ways for different coupon mortgage securities : In a Graduation Payment mortgage arrangement. prepayment affects price in different ways for different coupon mortgage securities.

Reviews

Write a Review

Financial Management Questions & Answers

  How are the shareholders taxed on the distributions

On January 1, 2015, Kinney, Inc., an S Corporation, reports $4,000 of accumulated E&P and a balance of $10,000 in AAA. Kinney has two shareholders, Erin and Frank, each of whom owns 500 shares of Kinney’s stock. Kinney distributes $6,000 to each shar..

  The optimal capital structure of a firm

The optimal capital structure of a firm. A firm is technically insolvent when.

  Two types of machines for manufacturing process

A company is considering two types of machines for a manufacturing process. Compare these two mutually exclusive alternatives by the present-worth method.

  Calculate dividend yield and expected capital gains yield

Calculate the dividend yield and the expected capital gains yield for year 1.

  Information to manage the cost of processing orders

El Dorado Company has two production plants. Recently, the company conducted an ABM study to determine the cost of activities involved in processing orders for parts at each of the plants. How might an operations manager use this information to manag..

  Determine its cost of debt

Advance, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 20 years to maturity that is quoted at 109 percent of face value. The issue makes semiannual payments and has a coupon rate of 6 percent annually

  Explain the shape of the demand and supply curves

Which parties are the net suppliers of loanable funds? Explain the shape of the demand and supply curves

  What is the NPV of project

Fox Hollow Franks is looking at a new system with an installed cost of $540,000. what is the NPV of this project?

  How does the idea of dividend irrelevance theory proposed

How does the idea of the "dividend irrelevance theory" proposed by miller and modigliani affect what you're saying?

  Internal and the sustainable rates of growth

Why is it important for managers to understand the importance of both the internal and the sustainable rates of growth?

  Why does CAPM imply that investors should trade very rarely

Why doe sthe CAPM imply that investors should trade very rarely?

  What is the capital gains yield of this stock

You're analyzing the stock of a certain company. What is the capital gains yield of this stock?

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