10- In a capital project, an old machine, which was purchased at a cost of 600.000 TL 3 years ago and had a useful life of 5 years will be sold now at a price of 300.000 TL. The machine also had a salvage value of X. The company applies accelerated depreciation method. Tax rate is 40%. In order to produce a net disposal cash inflow of 269.472 TL, what should be the X?

10- In a capital project, an old machine, which was purchased at a cost of 600.000 TL 3 years ago and had a useful life of 5 years will be sold now at a price of 300.000 TL. The machine also had a salvage value of X. The company applies accelerated depreciation method. Tax rate is 40%. In order to produce a net disposal cash inflow of 269.472 TL, what should be the X?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

please also draw a cash flow
1
please answer all
6. A drill press costs $30,000 and is expected to have a 10 year life. The drill press will be depreciated on a straight-line basis over 10 years to a zero estimated salvage value. This machine is expected to reduce the firm's cash operating costs by $4,500 per year. If the firm is in the 40 percent marginal tax bracket, determine the annual net cash flows generated by the drill press.
3. A project requires an initial investment of $1,000,000 and generates annual income of $300,000 for the next 4 years with a salvage value of $200,000. At MARR of 10% determine if this is a good investment. Use MACRS with the depreciation life of 3 years. Effective tax rate is 40%. Use PW. Not a good investment O Good investment
10. M&T Inc. is considering a robotic lawn care machine. Base price is $200,000. Also $20,000 to install it and can be depreciated using straight line depreciation. It will save $100,000 a year for 5 years in the cost of using an outside lawn care company. The tax rate is 30%. (a) What is up front year 0 capital flow. (b) What are net cash flows for years 1 through 5 assuming salvage value end of year 5 is $30,000?
1. For ABC project, book value of the equipment is estimated to be 500,000 at the end of the project's life, and the market value is expected to be 400,000. Clean up costs are 50,000 and change in working capital is 100,000. Calculate net salvage value assuming a 30% tax rate. Paragraph В I !!
A company is considering replacing an existing machine with a more moden one. Here are some of the details: The tax rate is 40%. Assume straight-line depreciation and a RRR of 10%. Assume the salvage value of the investment is equal to zero when calculating the depreciation charge. O Find the NPV associated with the project Old Machine New Machine $1,000,000 (7 years ago) $1,500,000 $200,000 $300,000 $0 (3 years from now) Purchase Price Market Value $1,500,000 $1,500,000 $100,000 (10 years from now) Book Value Salvage Value Age Original Life Yearly capacity Sales Price 7 10 10 55,000 units $7/unit 90,000 units $7/units Yearly expenses $100,000 $90,000 Training expenses Inventory not applicable $5,000 $30,000 $75,000
Amazon in OKC has just invested $250,000 in equipment having a negligible salvage value (SV 0) regardless of when the equipment if replaced. O&M costs equal $50,000 the first year and increase $10.000 per year. Based on a MARR of 10% What is the Capital Recovery (CR) cost for Year 4? A. $86,428 B. $60,317 C. $47,320 D. $39,569
1.
4.
What is the NPV of a project that costs $100,000, provides $23,000 in cash flows annually for six years, requires a $5,000 increase in net working capital (recaptured at the end), and depreciates the asset at 15 percent declining balance over six years and sold at zero salvage value? The discount rate is 14 percent. The tax rate is 40 percent $6,136.52 -$29639.22 -$23,460 -$13,283