An increasingly popular trend in mountain biking is to remove the chain and coast down the mountain. This has reduced demand for crank sets, chains, and derailleurs. As a result, Endo Mountain Bikes Inc. is shutting down its bicycle propulsion plant. It purchased the plant 2 years ago for $300,000. It can sell the plant today for $153,938.2. The plant is in Class 43 with a depreciation rate of 30%. When the plant is closed, Endo's net working capital will decrease by $50,000. EBITDA in the final year is $250,000. Endo's tax rate is 35%, and their cost of capital is 8%. What are the terminal year cash flows? $
An increasingly popular trend in mountain biking is to remove the chain and coast down the mountain. This has reduced demand for crank sets, chains, and derailleurs. As a result, Endo Mountain Bikes Inc. is shutting down its bicycle propulsion plant. It purchased the plant 2 years ago for $300,000. It can sell the plant today for $153,938.2. The plant is in Class 43 with a depreciation rate of 30%. When the plant is closed, Endo's net working capital will decrease by $50,000. EBITDA in the final year is $250,000. Endo's tax rate is 35%, and their cost of capital is 8%. What are the terminal year cash flows? $
Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter11: Cash Flow Estimation And Risk Analysis
Section: Chapter Questions
Problem 10P: St. Johns River Shipyards welding machine is 15 years old, fully depreciated, and has no salvage...
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![An increasingly popular trend in mountain biking is to remove the chain and coast down the mountain. This has reduced demand for crank sets, chains, and derailleurs. As a result, Endo Mountain Bikes Inc. is shutting down its bicycle propulsion plant. It purchased
the plant 2 years ago for $300,000. It can sell the plant today for $153,938.2. The plant is in Class 43 with a depreciation rate of 30%. When the plant is closed, Endo's net working capital will decrease by $50,000. EBITDA in the final year is $250,000. Endo's tax rate
is 35%, and their cost of capital is 8%. What are the terminal year cash flows?
$](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F797fd344-5899-4cd8-b1cc-c69774c908d3%2F79533e98-5094-4853-9996-bf047f48476c%2Fl2oqto_processed.jpeg&w=3840&q=75)
Transcribed Image Text:An increasingly popular trend in mountain biking is to remove the chain and coast down the mountain. This has reduced demand for crank sets, chains, and derailleurs. As a result, Endo Mountain Bikes Inc. is shutting down its bicycle propulsion plant. It purchased
the plant 2 years ago for $300,000. It can sell the plant today for $153,938.2. The plant is in Class 43 with a depreciation rate of 30%. When the plant is closed, Endo's net working capital will decrease by $50,000. EBITDA in the final year is $250,000. Endo's tax rate
is 35%, and their cost of capital is 8%. What are the terminal year cash flows?
$
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