Luki-Liku Co. purchases an asset for $100,000 with an estimated life of 5 years and a salvage value of zero. The company’s profit per year will be $30,000 before depreciation and taxes. If the annual tax rate applicable to this activity is 30% and the after-tax MARR is 12% per year, calculate the present worth of the after-tax cash flows when (a) the straight-line depreciation is used, and (b) the double-declining balance depreciation is used.

Q: The Wet Corporation has an investment project that will reduce expenses by $30,000 per year for 3…

A: Depreciation year 1= Depreciation rate * Project cost= 0.3333 * 35,000= 11665.50

Q: A corporation expects to receive $32,000 each year for 15 years from the sale of a product. There…

A: Rate of return is the annual income in percentage earned from an investment.

Q: Net cash flows Year 1 $60,000 Year 2 $40,000 Year 3 $70,000 Year 4 $125,000 Year 5 $35,000

A: Payback period is the time in which the initial investment is recovered through the future cash…

Q: Hayes, Inc. is considering buying a large piece of equipment for $80,000. Hayes expects that the…

A: It is the cash flow generated by the operations held for the business and its working.

Q: Suppose you sell a fixed asset for $111,000 when its book value is $131,000. If your company's…

A: Given information: Book Value = $131,000 Sale value =  $111,000  Tax rate = 40% or 0.40 Required:…

Q: al investment   $450,000 Incremental net cash flows year 1   $285,000 Incremental net cash flows…

A: useful life = 3 years The discount rate =12% Initial investment   $450,000 Incremental net cash…

Q: A potential investment has a cost of $395,000 and a useful life of 6 years. Annual cash sales from…

A: Decisions made regarding the capital budget have the potential to affect the financial performance…

Q: A company is deciding whether to launch a new product or not. The research and development cost…

A: Relevant net cash flow of the business means after tax cash inflow of the business after deducting…

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: Mac, Incorporated, has sales of $50,000, costs of $23,000, depreciation expense of $2,250, and…

A: Operating Cash Flow (OCF) is a measure of the cashflows generated by a company's core business…

Q: An investor owns a property that produces an NOI of $110,000 and has an annual debt service of…

A: Net Operating Income = NOI = $110,000Annual Debt Service = d = $70,000cost recovery = c =…

Q: Jeff's Auto Repair is looking at making an investment of $732,000 in new machinery. They expect to…

A: The payback period is a metric used in the evaluation of projects where capital recovery and…

Q: What is the annual operating free cash flow if operating revenues increase by $1.2 million,…

A: Operating Cash flow is the amount which is earned by the investor from the project. It is the net…

Q: tion is considering an investment proposal with the following cash flows: Initial investment in…

A: Investors may evaluate the success of investments like stocks, and bonds, using the annual rate of…

Q: DON Corporation is contemplating the purchase of a machine that will produce net after tax cash…

A: The present value indicate the current value of money to be received or paid in the future. It helps…

Q: Merigold company is considering investing in new equipment that will cost $1,417,000 with a 10-year…

A: The cash payback period refers to the time required to recover the cost of the investment made by…

Q: Suppose you sell a fixed asset for $10,000 when its book value is $2,000. If your company's marginal…

A: Book value is the carrying value of an asset or the value of an asset in the accounting books. Each…

Q: Suppose you sell a fixed asset for $126,000 when it's book value is $157,000. If your company's…

A: The computation of after tax cash flow is as follows:Hence, the after tax cash flow is $136850.

Q: Bottoms Up Diaper Service is considering the purchase of a new industrial washer. It can purchase…

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

Q: Bau Long-Haul, Inc., is considering the purchase of a tractor-trailer that would cost $325,526,…

A: The internal rate of return is the predicted yearly rate of growth from an investment. Business…

Q: Suppose you sell a fixed asset for $112,000 when its book value is $112,000. If your company's…

A: Cash flow is the movement of money in and out of a company.

Q: You are purchasing an equipment for $ 200,000 for your new store. Assume the store has no other…

A: Net Cash Flow: Net cash flow is the difference between a cash inflow and cash outflow of a Company…

Q: atur Bicydes just bought a new brake calibration machine that is expected to generate $24,000 in new…

A: Variables in the question:New revenue each of the next 4 years=$24000No increase in cash operating…

Q: Your firm, Agrico Products, is considering the purchase of a tractor that has a net cost of $72,000,…

A: Net Present Value: To determine the current value of a future stream of payments, one uses net…

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: ne time value of money tables in Appen ate the net present value for the equipr y index to the…

A: Net present value (NPV) is used to determine the present value of all future cash flows. Net present…

Q: J & J Enterprises is considering a cash acquisition of Patterson Steel Company for $5,800,000.…

A: Initial cost = $5,800,000Cost of capital = 11%Years 1-5Years 6-15 Years 16-20Cash inflow (after…

Q: Consider an asset that costs $1,280,170 and is depreciated straight-line to 83,206 over its 14-year…

A: Cost of asset = 1,280,170 residual value = 83206  estimated life = 14 year annual depreciation =…

Q: Need help with this Question

A: Step 1:

Q: How do I create an After tax Cash Flow Analysis?  Use rounded answers for subsequent calculations

A: Net present value is the difference between present value of cash inflows and present value of cash…

Q: An income-producing property is priced at $600,000 and is expected to generate the following…

A: The NPV will be the amount that is computed after finding the total of the discounted value of cash…

Q: Consider an asset that costs $1,156,294 and is depreciated straight-line to zero over its 10-year…

A: Formula. Depreciation per year =( cost - salvage value) ÷ useful life.

Q: A firm buys a piece of equipment for $115,866.00 and will straight-line depreciate it to zero over…

A: Annual depreciation=(Cost-Residual value)/Useful life=(115866/5)=$23173.2/yearAnnual tax…

Leasing

Leasing is a contractual arrangement in which someone (a lessee) pays the owner (or lessor) of a building, land, vehicle, or other asset for the use of that asset. The lease is the agreement between lessee and lessor.