Acme is considering the sale of a machine with a book value of $160,000 and 3 years remaining in its useful life. Straight-line depreciation of $50,000 annually is available. The machine has a current market value of $200,000. What is the cash flow from selling the machine if the tax rate is 30%? choices 184k 190k 192k 188k 200k

Acme is considering the sale of a machine with a book value of $160,000 and 3 years remaining in its useful life. Straight-line depreciation of $50,000 annually is available. The machine has a current market value of $200,000. What is the cash flow from selling the machine if the tax rate is 30%? choices 184k 190k 192k 188k 200k

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

5. Does your company want to purchase this machine that will provide cost savings of $100,000 annually for its useful life (8 years)? The cost is $250,000; tax rate is 36% and discount rate is 14%. Compute straight-line depreciation for 8 years with zero salvage value. Calculate the cash flows and determine the NPV and IRR. Does your company want to buy this machine?
Provide please answer in text Format
A new machine costs $798,410 and falls in a 26.50% CCA class. The machine will have zero value after 5 years of use but will save $370,940 annually in operating costs before taxes in those five years. Assume a tax rate of 32.73%. Using a required return of 13.67%, what is the present value of the CCA tax shield? Question 18 options: $157,975 $162,026 $166,076 $170,127 $174,178
XYZ company has A piece of new equipment will cost $70,000. The equipment will provide a cost savings of $15,000 per year for ten years, after which it will have a $3,000 salvage value. If the required rate of return is 14%, the equipment's net present value is: a. (8240) b. None of answers are correct c. 9050 d. 23888
A company plans to purchase a computer network control (CNC) machine for $650,000.00. If the company makes a profit from the products of the machine of $265,000.00 at years three and four and the company will be able to sell the machine at year four for $125,000.00 ( salvage value). The company wants to know if they will be able to recover the cost of the machine if the interest rate is 4% ? Provide them with the future value of the transactions to answer their question (if the number is negative it will not pay back, if it is positive it will). SOLVE IN EXCEL
XMohan & Co. is considering the purchase of machine. Two machines X and Y each Costing Rs.50, 000 are available. Earnings after taxes before depreciation are expected to be as under: Year 1 2 3 4 5 Machine 'X' 15000 20000 25000 15000 10000 (Rs.) Machine 'Y' (Rs.) 5000 15000 20000 30000 20000 Estimate the two alternatives according to: (a) Payback method, and (b) NPV method a discount rate of 10% is to be used.
This question is based on the following information: Sphinx Company is planning to invest in a machinery costing P 500,000 with an estimated useful life of 5 years with no salvage value. The use of this machinery will generate cash savings of P 175,000 before taxes. Income taxes are 20% each year, What is the payback reciprocal? 32% P 33% 34% 35% What is the payback period? 3.125 years 3.152 years 3.512 years 3,521 years
A company has purchased a machine (CCA rate 24%) at $300,000 and has a tax rate of 33.00%. By how much will the NPV change if the company is able to obtain a $13,000 salvage value for its machine at the end of the project's life in Year 4? Assume a discount rate of 11.20% and that all else remains the same. Question 10Answer a. $8,502 b. $10,415 c. -$1,913 d. $6,589 e. $10,075
The St. Louis to Seattle Railroad is considering acquiring equipment at a cost of $250,000. The equipment has an estimated life of 10 years and no residual value. It is expected to provide yearly net cash flows of $50,000. The company's minimum desired rate of return for net present value analysis is 15%. Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.353 2.991 6 4.917 4.355 4.111 3.785 3.326 7 5.582 4.868 4.564 4.160 3.605 8 6.210 5.335 4.968 4.487 3.837 9 6.802 5.759 5.328 4.772 4.031 10 7.360 6.145 5.650 5.019 4.192 Compute the following: a. The average rate of return, giving effect to straight-line depreciation on the investment. If required, round your answer to one decimal place.fill in the blank 1 of 1% b. The cash payback period. c. The net present value. Use the above table of the present value of an annuity of $1. Round…
Heidi Company is considering the acquisition of a machine that costs $536,000. The machine is expected to have a useful life of 6 years, a negligible residual value, an annual net cash inflow of $104,000, and annual operating income of $84,095. The estimated cash payback period for the machine is (round to one decimal point)? Oa. 5.2 years Ob. 6.4 years Oc. 6.0 years Od. 6.5 years
q5