Bryson Sciences is planning to purchase a high-powered microscopy machine for $384,000 and incur an additional $30,800 in installation expenses. It is replacing older microscopy equipment that can be sold for $116,300, resulting in taxes from a gain on the sale of $42,000. Because of this transaction, current assets will increase by $13,000 and current liabilities will increase by $5,200. Calculate the initial investment in the high-powered microscopy machine. The initial investment is $ (Round to the nearest dollar.)

Bryson Sciences is planning to purchase a high-powered microscopy machine for $384,000 and incur an additional $30,800 in installation expenses. It is replacing older microscopy equipment that can be sold for $116,300, resulting in taxes from a gain on the sale of $42,000. Because of this transaction, current assets will increase by $13,000 and current liabilities will increase by $5,200. Calculate the initial investment in the high-powered microscopy machine. The initial investment is $ (Round to the nearest dollar.)

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

Bryson Sciences is planning to purchase a high-powered microscopy machine for $55,000 and incur an additional $7,500 in installation expenses. It is replacing sim- ilar microscopy equipment that can be sold to net $35,000, resulting in taxes from a gain on the sale of $11,250. Because of this transaction, current assets will increase by $6,000 and current liabilities will increase by $4,000. Calculate the initial invest- ment in the high-powered microscopy machine.
A proposed cost-saving device has an installed cost of $730,000. The device will be used in a five-year project but is classified as three-year MACRS property for tax purposes. The required initial net working capital investment is $140,000, the marginal tax rate is 22 percent, and the project discount rate is 10 percent. The device has an estimated Year 5 salvage value of $101,000. What level of pretax cost savings do we require for this project to be profitable? (MACRS schedule) (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Pretax cost savings $ 216,693.04
You must evaluate the purchase of a proposed Spectrometer for R&D department. The purchase. Price of the spectrometer including modifications is $200,000, and the equipment will be depreciated at the time of purchase. The equipment would be sold after 3 years for $51,000. The equipment would require a $15,000 increase in net operating working capital (spare parts inventory). The project would have no effect on revenues, but it should save firm $49,000 per year in before-tax laber casts. The firm's marginal fecteral-plus-state tarrate is 25% a) What is the initial investment outlay for the Spectrumeter after bonus depreciation is considered, that is the Year 0 project cash flow? the Enter your answer as a a positive value. Rand answer to the nearest dollar. $ b.) What are the project's annual cash flows in Years Round 1, 2, and 3? Do not round intermediate calculations. your answers to the nearest dollar. Year 1: 9 Year 2: $ Year 3: $ 10 4 your
Nguyen Inc. is considering the purchase of a new computer system (ICX) for $140,000. The system will require an additional $20,000 for installation. If the new computer is purchased it will replace an old system that has been fully depreciated. The new system will be depreciated over a period of 8 years using straight-line depreciation. If the ICX is purchased, the old system will be sold for $20,000. The ICX system, which has a useful life of 8 years, is expected to increase revenues by $31,000 per year over its useful life. Operating costs are expected to decrease by $3,000 per year over the life of the system. The firm is taxed at a 40 percent marginal rate. Round your answers to the nearest dollar. A. what investment is required to acquire the ICX system and replace the old system? B. compute the annual net cash flows associated with the purchase of the ICX system.
LePew Cosmetics is evaluating a new fragrance-mixing machine. The machine requires an initial investment of $360000 and will generate cash inflows of $63450 per year for 8 years. If the cost of capital is 14%, calculate the net present value (NPV) and indicate whether to accept or reject the machine. The NPV of the project is $__________
Blossom Company is considering buying a new farm that it plans to operate for 10 years. The farm will require an initial investment of $11.95 million. This investment will consist of $2.60 million for land and $9.35 million for trucks and other equipment. The land, all trucks, and all other equipment are expected to be sold at the end of 10 years for a price of $5.20 million, which is $2.25 million above book value. The farm is expected to produce revenue of $2.05 million each year, and annual cash flow from operations equals $1.95 million. The marginal tax rate is 25 percent, and the appropriate discount rate is 9 percent. Calculate the NPV of this investment. (Do not round factor values. Round final answer to 2 decimal places, e.g. 5,275.25.) NPV $ The project should b accepted rejected
Munch N' Crunch Snack Company is considering two possible investments: a delivery truck or a bagging machine. The delivery truck would cost $43,056 and could be used to deliver an additional 95,000 bags of pretzels per year. Each bag of pretzels can be sold for a contribution margin of $0.45. The delivery truck operating expenses, excluding depreciation, are $1.35 per mile for 24,000 miles per year. The bagging machine would replace an old bagging machine, and its net investment cost would be $61,614. The new machine would require three fewer hours of direct labor per day. Direct labor is $18 per hour. There are 250 operating days in the year. Both the truck and the bagging machine are estimated to have 7-year lives. The minimum rate of return is 13%. However, Munch N' Crunch has funds to invest in only one of the projects. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 2 3 4 5 6 7 8 9 10 0.943 1.833 2.673 3.465 4.212 4.917 5.582 6.210 6.802 7.360…
A firm is considering a 3yr project to improve its production efficiency. Buying a new machine for $375,000 is estimated to result in operating cash flow of $155,000. The after tax salvage value would be $42,000. The machine also requires an initial investment in working capital of $26,000. Given the discount rate is 9 percent, calculate the project's NPV.
You must evaluate the purchase of a proposed spectrometer for the R&D department. The purchase price of the spectrometer including modifications is $120,000, and the equipment will be fully depreciated at the time of purchase. The equipment would be sold after 3 years for $24,000. The equipment would require a $12,000 increase in net operating working capital (spare parts inventory). The project would have no effect on revenues, but it should save the firm $64,000 per year in before-tax labor costs. The firm's marginal federal-plus-state tax rate is 25%. a. What is the initial investment outlay for the spectrometer after bonus depreciation is considered, that is, what is the Year 0 project cash flow? Enter your answer as a positive value. Round your answer to the nearest dollar. $ b. What are the project's annual cash flows in Years 1, 2, and 3? Do not round intermediate calculations. Round your answers to the nearest dollar. Year 1: $ Year 2: $ Year 3: $ c. If the WACC is 11%, should…
You must evaluate the purchase of a proposed spectrometer for the R&D department. The purchase price of the spectrometer including modifications is $290,000, and the equipment will be fully depreciated at the time of purchase. The equipment would be sold after 3 years for $48,000. The equipment would require an $8,000 increase in net operating working capital (spare parts inventory). The project would have no effect on revenues, but it should save the firm $33,000 per year in before-tax labor costs. The firm's marginal federal-plus-state tax rate is 25%. What is the initial investment outlay for the spectrometer, that is, what is the Year 0 project cash flow? Enter your answer as a positive value. Round your answer to the nearest dollar. $ What are the project's annual cash flows in Years 1, 2, and 3? Do not round intermediate calculations. Round your answers to the nearest dollar. Year 1: $ Year 2: $ Year 3: $
Geo-Star Manufacturing Company is considering a new investment in a punch-press machine that will cost $96,000 and has an annual maintenance cost of $10,800. There is also an additional overhauling cost of $23,000 for the equipment once every four years. Assuming that this equipment will last infinitely under these conditions, what is the capitalized equivalent cost of this investment at an interest rate of 15%? Click the icon to view the interest factors for discrete compounding when i=15% per year. The capitalized equivalent cost of this investment is $ thousand. (Round to the nearest whole number.) More Info Single Payment Compound Amount Factor Equal Payment Series Sinking Present Fund Compound Amount Factor (F/A, i, N) Capital Recovery Worth Factor Factor Factor N (F/P, i, N) (A/F, i, N) (P/A, i, N) (A/P, i, N) 1 1.1500 1.0000 1.0000 0.8696 1.1500 2 1.3225 2.1500 0.4651 1.6257 0.6151 3 1.5209 3.4725 0.2880 2.2832 0.4380 4 1.7490 4.9934 0.2003 2.8550 0.3503 5 2.0114 6.7424 0.1483…
You must evaluate the purchase of a proposed spectrometer for the R&D department. The purchase price of the spectrometer including modifications is $190,000, and the equipment will be fully depreciated at the time of purchase. The equipment would be sold after 3 years for $57,000. The equipment would require a $14,000 increase in net operating working capital (spare parts inventory). The project would have no effect on revenues, but it should save the firm $24,000 per year in before-tax labor costs. The firm's marginal federal-plus-state tax rate is 25%. What is the initial investment outlay for the spectrometer after bonus depreciation is considered, that is, what is the Year 0 project cash flow? Enter your answer as a positive value. Round your answer to the nearest dollar.$ What are the project's annual cash flows in Years 1, 2, and 3? Do not round intermediate calculations. Round your answers to the nearest dollar.Year 1: $ Year 2: $ Year 3: $ If the WACC is…

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS