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- A firm has the opportunity to invest in a project having an initial outlay of $20,000. Net cash inflows (before depreciation and taxes) are expected to be $5,000 per year for five years. The firm uses the straight-line depreciation method with a zero salvage value and has a (marginal) income tax rate of 40 percent. The firms cost of capital is 12 percent. Compute the IRR and the NPV. Should the firm accept or reject the project?An investment of $1.000.000 will be included in the 7-year MACRS class for depreciation. It would also require an additional $150,000 to invest in inventory and would add $50,000 to accounts payable. Will generate $400000 in revenue and $150000 in cash expenses annually. The tax rate is 21 per cent. What are the incremental cash flows for years 0, 1, 7 and 8?Q7.Jett Gas LLC has total sales of $1,479,600 and costs of $914,300. Depreciation is$41,650 and the tax rate is 34 percent. The firm does not have any interest expense.What is the operating cash flow?
- urgent A firm can purchase a centrifugal separator (5-year MACRS property) for $17,000. The estimated salvage value is $4,000 after a useful life of six years. Operating and maintenance (O&M) costs for the first year are expected to be$1,700. These O&M costs are projected to increase by $500 per year each year thereafter. The income tax rate is 25% and the MARR is 13% after taxes. What must the uniform annual benefits be for the purchase of the centrifugal separator to be economical on an after-tax basis? The uniform annual benefits should be........... (Round to the nearest dollar.)You are evaluating two different silicon wafer milling machines. The Techron | costs $264,000, has a 3-year life, and has pretax operating costs of $71,000 per year. The Techron Il costs $460,000, has a 5-year life, and has pretax operating costs of $44,000 per year. For both milling machines, use straight-line depreciation to zero over the project's life and assume a salvage value of $48,000. If your tax rate is 22 percent and your discount rate is 12 percent, compute the EAC for both machines. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) > Answer is complete but not entirely correct. Techron I $ -134,840.83 Techron II $ -107,570.183. A machine is purchased for S70,000. Life is 10 years with a S10,000 salvage. MARR is 10 and the tax rate is 50%. Cash operating costs are $4500 per year. Five year MACRS (20, 32, 19.2, 11.52, 11.52,5.76) depreciation will be used. Calculate the annual equivalent revenue requirements for this machine.
- An asset with a cost of $100,000 and accumulated depreciation of $80,000 is sold for $8000.What is the amount of the gain or loss on disposal of the plant asset?Machine that cost $150,000 and on which $120,000 of accumulated depreciation has beenrecorded was disposed of for $30,000 cash. Calculate the gain or loss.Economics The first cost of a 3D printer (computer equipment) is $26,000 with operating costs of $0.27 per unit. It will be sold for $2800 at the end of six years. Production numbers will be 780 units per day for 280 days per year. What is the after tax annual cost of the printer if the MARR is 14 % and income tax rate is 44%.
- 31. The purchase of a motor for P6000 and a generator for P4000 will allow the company to produce its own energy. The configuration can be assembled for P500. The service will operate for 1600 hours per year for 10 years. The maintenance cost is P300 per year, and cost to operate is PO.85 per hour for fuel and related cost. Using straight line depreciation, what is the annual cost for the operation? There is a P400 salvage value for the system at the end of 10 year. a. P2,710 c. P2,630 b. P2,480 d. P2,670Anderson International Limited is evaluating a project in Erewhon. The project will create the following cash flows: Year Cash Flow 0 -$ 1,210,000 1 385,000 2 450,000 3 4 345,000 300,000 All cash flows will occur in Erewhon and are expressed in dollars. In an attempt to improve its economy, the Erewhonian government has declared that all cash flows created by a foreign company are "blocked" and must be reinvested with the government for one year. The reinvestment rate for these funds is 5 percent. If the company uses a required return of 10 percent on this project, what are the NPV and IRR of the project?11. A factory equipment has an initial cost of P200,000.00. Its salvage value after ten years is P20,000.00.As a percentage of the initial cost, what is the straight-line depreciation rate of the equipment? with cash flow