corporation want to estimate the terminal cash flow. The proposed machine will be disposed of at the end of its usable life of five years at an estimated sale price of $3,500. The machine has an original purchase price of $80,000, installation cost of $20,000, and will be depreciated under the five-year MACRS. Net
corporation want to estimate the terminal cash flow. The proposed machine will be disposed of at the end of its usable life of five years at an estimated sale price of $3,500. The machine has an original purchase price of $80,000, installation cost of $20,000, and will be depreciated under the five-year MACRS. Net
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
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A corporation want to estimate the terminal cash flow. The proposed machine will be disposed of at the end of its usable life of five years at an estimated sale price of $3,500. The machine has an original purchase price of $80,000, installation cost of $20,000, and will be
Calculate the terminal cash flow.
5 year MACRS depreciation percentages
Year Percentage
1 0.2
2 0.32
3 0.19
4 0.12
5 0.12
6 0.05
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A corporation want to estimate the terminal cash flow. The proposed machine will be disposed of at the end of its usable life of five years at an
estimated sale price of $3,500. The machine has an original purchase price of $80,000, installation cost of $20,000, and will be depreciated under the
five-year MACRS. Net working capital is expected to decline by $6,200. The firm has a 40 percent tax rate on ordinary income and long-term capital
gain.
Calculate the terminal cash flow. $
5 year MACRS depreciation percentages
Year
Percentage
1
0.2
0.32
3
0.19
4
0.12
0.12
6
0.05
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