Proposed Project Equipment cost plus installation Increase in current assets $15,000 S142,858 Equip. market value at end of 3 yrs Tax rate $30,000 40% $13,000 100,000 Increase in payables and accruals Unit sales Sales price per unit Variable cost per unit (in dollars) WACC 100% S4.00 S2.25 Fixed costs S65,000 Table 12A.2 Recovery Allowance Percentage for Personal Property Class of Investment Ownership Year 3-year 5-year 7-year 33% 20% 14% 2 45 32 25 3 15 19 17 4 7 12 13 11 9 6 6 7 9 8 9 10 11 100% 100% 100% 1) What is the Ending Book Value at the end of year 3 using: $ 2) What is the Net cash flow from salvage at the end of year 3? S
Proposed Project Equipment cost plus installation Increase in current assets $15,000 S142,858 Equip. market value at end of 3 yrs Tax rate $30,000 40% $13,000 100,000 Increase in payables and accruals Unit sales Sales price per unit Variable cost per unit (in dollars) WACC 100% S4.00 S2.25 Fixed costs S65,000 Table 12A.2 Recovery Allowance Percentage for Personal Property Class of Investment Ownership Year 3-year 5-year 7-year 33% 20% 14% 2 45 32 25 3 15 19 17 4 7 12 13 11 9 6 6 7 9 8 9 10 11 100% 100% 100% 1) What is the Ending Book Value at the end of year 3 using: $ 2) What is the Net cash flow from salvage at the end of year 3? S
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
Related questions
Question
100%
See image for MACRS table
1) What is the Ending Book Value at the end of year 3 using MACRS: $
2) What is the Net cash flow from salvage at the end of year 3? $
![Proposed Project
Equipment cost plus installation
Increase in current assets
$15,000
S142,858
Equip. market value at end of 3 yrs
Tax rate
$30,000
40%
$13,000
100,000
Increase in payables and accruals
Unit sales
Sales price per unit
Variable cost per unit (in dollars)
WACC
100%
S4.00
S2.25
Fixed costs
S65,000
Table 12A.2
Recovery Allowance Percentage
for Personal Property
Class of Investment
Ownership Year
3-year
5-year
7-year
33%
20%
14%
2
45
32
25
3
15
19
17
4
7
12
13
11
9
6
6
7
9
8
9
10
11
100%
100%
100%
1) What is the Ending Book Value at the end of year 3 using: $
2) What is the Net cash flow from salvage at the end of year 3? S](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbc05fc18-1872-46bd-a823-01fc2f5c699e%2F388d9eb8-6b77-43b3-a57c-8416241a1367%2Fsstegsk.jpeg&w=3840&q=75)
Transcribed Image Text:Proposed Project
Equipment cost plus installation
Increase in current assets
$15,000
S142,858
Equip. market value at end of 3 yrs
Tax rate
$30,000
40%
$13,000
100,000
Increase in payables and accruals
Unit sales
Sales price per unit
Variable cost per unit (in dollars)
WACC
100%
S4.00
S2.25
Fixed costs
S65,000
Table 12A.2
Recovery Allowance Percentage
for Personal Property
Class of Investment
Ownership Year
3-year
5-year
7-year
33%
20%
14%
2
45
32
25
3
15
19
17
4
7
12
13
11
9
6
6
7
9
8
9
10
11
100%
100%
100%
1) What is the Ending Book Value at the end of year 3 using: $
2) What is the Net cash flow from salvage at the end of year 3? S
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step 1
VIEWStep by step
Solved in 1 steps with 1 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
![Essentials Of Investments](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781260013924/9781260013924_smallCoverImage.jpg)
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
![FUNDAMENTALS OF CORPORATE FINANCE](https://www.bartleby.com/isbn_cover_images/9781260013962/9781260013962_smallCoverImage.gif)
![Financial Management: Theory & Practice](https://www.bartleby.com/isbn_cover_images/9781337909730/9781337909730_smallCoverImage.gif)
![Essentials Of Investments](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781260013924/9781260013924_smallCoverImage.jpg)
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
![FUNDAMENTALS OF CORPORATE FINANCE](https://www.bartleby.com/isbn_cover_images/9781260013962/9781260013962_smallCoverImage.gif)
![Financial Management: Theory & Practice](https://www.bartleby.com/isbn_cover_images/9781337909730/9781337909730_smallCoverImage.gif)
![Foundations Of Finance](https://www.bartleby.com/isbn_cover_images/9780134897264/9780134897264_smallCoverImage.gif)
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
![Fundamentals of Financial Management (MindTap Cou…](https://www.bartleby.com/isbn_cover_images/9781337395250/9781337395250_smallCoverImage.gif)
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…](https://www.bartleby.com/isbn_cover_images/9780077861759/9780077861759_smallCoverImage.gif)
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