If a chemical olant is paying 43% in income taxes and wants to purchase a ball mill designed to last for 20 years at a cost of $76,000, with no salvage value. Annual income generated will be $24,000 and annual expenditures will be $13,000. Using single line depreciation and a 10% interest rate, what is the 20 year after-tax present worth of the project?

Q: 2. Nova Corp. is considering the purchase of a $300,000 machine that has a 5 year life with no…

A: A) NPV of Buying the MachineCalculate the After-Tax Cost of the MachineThe machine costs $300,000…

Q: Karsted Air Services is now in the final year of a project. The equipment originally cost $24…

A: Given: Cost of equipment = $24 million Depreciated = 100% Tax rate = 30% Sale value = $7 million

Q: Marshall Miller & Company is considering the purchase of a new machine for $50,000, instated. The…

A: An asset's projected or estimated worth at the end of its useful life, net of any taxes, is its…

Q: Acefacto Inc., has asked for you to calculate the after-tax salvage value of an asset it plans on…

A: Data given: Sale price=$595,641 Book value after 10 years=$670,000 Tax rate=31%

Q: Ilana Industries Incorporated needs a new lathe. It can buy a new high-speed lathe for $1.1 million.…

A: Net present value is the most important capital budgeting methods used and is based time value of…

Q: Your company is considering a new project that will require $100,000 of new equipment at the start…

A: Npv is a capital budegting techniques which help in decision Making on the basis of future cash…

Q: New equipment costs $700,000 and is expected to last for four years with no salvage value. During…

A: CCA stands for Capital Cost Allowance. It's a tax term used in Canada to describe the rate at which…

Q: Karsted Air Services is now in the final year of a project. The equipment originally cost $33…

A: Book value of asset today = $0 million (100% depreciated)  Equipment selling price today = $10…

Q: Your firm needs a computerized machine tool lathe which costs $55,000 and requires $12,500 in…

A: Depreciation Tax Shield: It is possible to reduce taxable income by using a depreciation tax shield,…

Q: The XYZ Company is considering a new project that will have an annual depreciation expense of $3.7…

A: Approach to solving the question: Step 1: Figure out the cost of depreciation.First, figure out how…

Q: Get the Correct option with calculation and explanation

A: The problem requires the determination of the after-tax cash flows of the sale of machinery. In…

Q: Your company is considering a new project that will require $790,000 of new equipment at the start…

A: Depreciation per year = ($790,000 - $255,000) / 5.= $107,000.

Q: Pulaski Starlight Inc. is evaluating a project. The project is expected to generated new sales of…

A: Compute the year 3 depreciation expense, using the equation as shown below: Depreciation=Equipment…

Q: Your firm needs a machine which costs $220,000, and requires $37,000 in maintenance

A: MACRS (Modified Accelerated Cost Recovery System) is a system used to calculate tax deduction of…

Q: Moda Produce is considering the purchase of a new machine to replace the existing asset. The current…

A: There will be net proceeds ,that is , Cash inflow on sale of old machine. Initial investment outlay…

Q: A company is considering the purchase of a new machine for $50,000, installed. The machine has a tax…

A: For evaluating any new asset or project, cashflows are considered. For overall evaluation cashflows…

Q: What are the Equivalent annual savings?

A: Time value of money (TVM) refers to the method used to measure the amount of money at different…

Q: Suppose you are considering an investment project that requires $800.000, has a six-year life, and…

A: The difference between the current value of cash inflows and outflow of cash over a period of time…

Q: Your firm needs a machine which costs $280,000, and requires $43,000 in maintenance for each year of…

A: After Tax salvage value is that amount which is received by the investor from selling the assets…

Q: b) You purchase equipment for $50,000 and it costs $5,000 to have it delivered and installed. Based…

A: The value of a tax shield is simply the corporate tax rate multiplied by the cost of debt multiplied…

Q: Your firm needs a computerized line-boring machine which costs $80,000, and requires $20,000 in…

A: EAC is an economic equivalent uniform annual cost which includes the cost of ownership and…

Q: Elder, Inc. is considering the purchase of a new air-handling system that will have no effect on…

A: Savings means the amount which a firm earns by installing a new plant or project. The project which…

Q: Celtic Inc. is considering a 16-year project that will generate before tax cash flow of $18, 000 per…

A: Step-1

Q: A firm is looking at a new project requiring a machine that would cost $500,000.The cost will be…

A: Salvage value = $125,000Tax rate = 23%

Q: Karsted Air Services is now in the final year of a project. The equipment originally cost $24…

A: Book value of asset = 0 million (100% depreciated)  Equipment sold at = 10 million Tax rate = 20%

Q: Fort requires equipment costing $320,000.  It is a  9-year project, and is depreciated straight line…

A: cost of equipment= $320,000 life span of the project= 9 years  Sales generated= $189,000  cost=…

Q: Karsted Air Services is now in the final year of a project. The equipment originally cost $21…

A: Equipment originally cost =21,000,000 Depreciation (100%*21,000,000)  =21,000,000 Book value…

Q: You got asked to analyze a 5-year project for your firm. The project produces an annual revenue of…

A: Initial Investment  $  20,000.00 Annual revenue  $  28,500.00 Labor and materials cost  $…

Q: Consider an asset that costs $176,000 and is depreciated straight-line to zero over its 10- year tax…

A: Cost of asset = $176,000 depreciationmethod is straight line methodlife of the asset is 10 years.But…

Q: your company is considering a new project that will require $10,000 of new equipment at the start of…

A: Annual depreciation =(Cost-Salvage value)/Useful Life =(10000-3000)/5 =$1400/year

Q: Hello. Need help with the solution to question.  Calculate the annual straight-line depreciation…

A: Solution:- Depreciation means the cost of wear and tear of an asset. In case of straight line method…

Q: You must evaluate a proposal to buy a new milling machine. The purchase price of the milling…

A: As per our guidelines, we are supposed to answer only 3 sub-parts (if there are multiple sub-parts…

Q: A firm depreciated its assets with regard to an investment to $0.00 book value by the end of the…

A: Here, Scrap Market Value = $1,200,000 Life of the project = 15 years Interest rate = 14% Tax rate =…

Q: firm is considering purchasing a machine that costs $77,000. It will be used for six years, and the…

A: NPV is also known as Net Present Value. It is a capital budgeting technique which helps in decision…

Q: to Inc., has asked for you to calculate the after-tax salvage value of an asset it plans on using in…

A: Salvage value is the value at the end of a project when equipment is sold, If equipment is sold…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.