Quick Computing installed its previous generation of computer chip manufacturing equipment 3 years ago. Some of that older equipment will become unnecessary when the company goes into production of its new product. The obsolete equipment, which originally cost $35.00 million, has been depreciated straight-line over an assumed tax life of 5 years, but it can be sold now for $17.00 million. The firm’s tax rate is 30%. What is the after-tax cash flow from the sale of the equipment? (Enter your answer in millions rounded to 1 decimal place.)

Q: Quick Computing Installed its previous generation of computer chip manufacturing equipment 3 years…

A: Straight-line depreciation is a systematic method used to allocate the cost of an asset evenly over…

Q: Your firm is contemplating the purchase of a new $620,000 computer - based order entry system. The…

A: Step 1:Below are the calculationsInitial investment=Purchase cost−saving in…

Q: Quick Computing Installed its previous generation of computer chip manufacturing equipment 3 years…

A: Salvage Value Net of Tax is the amount received from sale of old equipment. It excludes the tax…

Q: You are contemplating the replacement of an old printing machine with a new model costing $56,000.…

A: When a company sells off its existing assets at a price higher than the book value of the asset,…

Q: Gemini, LLC, invested $1 million in a state-of-the-art information system that promises to reduce…

A: Computation of After-tax net present value of Gemini new information system is as follows:

Q: Your firm is contemplating the purchase of a new $570,000 computer-based order entry system. The…

A: IRR refers to the Internal Rate of Return..It is the discount rate at which the Net Present Value…

Q: Adidas bought a $36.4 million piece of equipment. It will be depreciated by $6.07 million per…

A: Depreciation is the decrease in value of equipment with time and use of equipment and depreciation…

Q: Allen Air Lines must liquidate some equipment that is being replaced. The equipment originally cost…

A: Equipment's after tax net salvage value = salvage value - tax on capital gain tax on capital gain =…

Q: Although the Chen Company's milling machine is old, it is still in relatively good working order and…

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

Q: The used equipment can be sold today for $4.6 million, and its tax rate is 25%. What is the…

A: After Tax Salvage Value: It is computed by reducing the tax on profit on the sale of equipment from…

Q: Allen Air Lines must liquidate some equipment that is being replaced. The equipment originally cost…

A: After-tax salvage value refers to the amount of equipment after the completion of its useful life…

Q: Sunrise Furniture Inc. wants to upgrade the existing production process. The cost-cutting project…

A: Depreciation is a non-cash expense. Although it is excluded while computing cashflows for capital…

Q: If the depreciation rates are 12% in Year 1 and 18% in Year 2, what is the depreciation tax shield…

A: Depreciation expense: Depreciation expense is the reduction in a particular asset due to its use or…

Q: The Target Copy Company is contemplating the replacement of its old printing machine with a new…

A: Initial Outlay is that amount which is required by the investor initially to start the new Project.…

Q: The Lesseig Company has an opportunity to invest in one of two mutually exclusive machines that will…

A: When a company has two investment alternatives with varying investment periods, the justifiable…

Q: Allen Air Lines must liquidate some equipment that is being replaced. The equipment originally cost…

A: Salvage value refers to the residual value, that is, the value at which the equipment can be traded…

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: Gator Bicycles just bought a new brake calibration machine that is expected to generate $36,000 in…

A: Operating cash flow is that amount which is earned by the investor from his investment. It includes…

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: Spherical Manufacturing recently spent $15 million to purchase some equipment used in the…

A: Capital Cost Allowance (CCA) is the method of charging depreciation on the written down value of the…

Q: Spherical Manufacturing

A: Capital cost allowance refers to the depreciation expense that would be allowed to be deducted from…

Q: Spectacular Flooring (SF) is a wood flooring wholesale company. SF is considering building a new…

A: Please find the answer to the above question below:

Q: Your firm is contemplating the purchase of a new $600,000 computer-based order entry system. The…

A: The Internal rate of return (IRR) is a return metric of a project, which helps us eliminate or…

Q: You are contemplating the replacement of an old printing machine with a new model costing $61,000.…

A: Initial Outlay is that amount which is required in zero period to start the project. It includes the…

Q: Your firm is contemplating the purchase of a new $555,000 computer-based order entry system. The…

A: IRR is the internal rate of return refers to the percentage of return at which present value of…

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

A: Has an investment project that will reduce expenses by $30,000 per year for 3 years. The project's…

Q: Your firm is contemplating the purchase of a new $530,000 computer - based order entry system. The…

A: IRR is also known as Internal Rate of Return.. It is a capital budgeting technique which helps in…

Q: (Ignore income taxes in this problem.) Your Company has some equipment that can either be repaired…

A: One of the capital budgeting metric which can be used to analyze an investment decision is called…

Q: Quick Computing installed its previous generation of computer chip manufacturing equipment 3 years…

A: In order to calculate after tax cash flow need to consider the sale value of the following that is…

Q: Spherical Manufacturing recently spent $19 million to purchase some equipment used in the…

A: CCA (Capital Cost Allowance) depreciation method is written down method of computing the…

Q: Allen Air Lines must liquidate some equipment that is being replaced. The equipment originally cost…

A: Original Cost = $11,500,000Depreciation = $11,500,000 × 65% = $7,475,000Book Value = Orginal Cost -…

Q: Novel Industries purchases a 41.2 million cyclo-converter. The cyclo-converter will be depreciated…

A: Depreciation is a non-cash expense.Depreciation is charged on fixed asset over a estimated useful…

Q: The Target Copy Company is contemplating the replacement of its old printing machine with a new…

A: Given variables:Cost of new model printing machine= $60,000Current book value of old machine…

Q: Your firm is contemplating the purchase of a new $540,000 computer - based order entry system. The…

A: > Given:> Initial investment= 540000> salvege value = 52000> savings before tax =…

Q: The Target Copy Company is contemplating the replacement of its old printing machine with a new…

A: After tax cash outlay of new machine is computed as follows-After tax cash outlay of new machine =…

Q: please answer this too accuretly:

A: The specific question is about a computer-based order entry system that will cost $535,000 and…

Q: Assume a machine was purchased 5 years ago for $800,000 and has been 75% depreciated. The firm…

A: Net profit is an organization's income after deducting expenses and tax liability from the revenue…

Q: A corporation is considering purchasing a machine that will save $150,000 per year before taxes. The…

A: Internal rate of return(IRR) is the rate that equates the present value of cash inflows with the…

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.