Suppose you sell a fixed asset for $109,000 when its book value is $129,000. If your company’s marginal tax rate is 39 percent, what will be the effect on cash flows of this sale (i.e., what will be the after-tax cash flow of this sale)?

Q: cash flow on

A: Cash flows refer to the exchange of money in and out of the company. It shows the company’s…

Q: You estimate that your sheep farm will generate 1.5 million of profits on sales of 4.4 million under…

A: The degree of operating leverage is an important financial metric or ratio. This metric or ratio is…

Q: You need to estimate the value of Laputa Aviation. You have the following forecasts (in millions of…

A: Year 1Year 2Year 3Year 4EBITDA$78$98$113$118Depreciation$38$48$53$58Pretax profit$40$50$60$60Tax…

Q: Calculate the tax consequences for the following assets sales. The assets all belong to a CCA class…

A: UCC UCC (undepreciated capital cost) is the balance cost of the capital invested in a fixed asset…

Q: A proposed new investment has projected sales of $720,000. Variable costs are 40 percent of sales,…

A: The income statement is an essential part of the financial statements of the company. It is prepared…

Q: You need to estimate the value of Laputa Aviation. You have the following forecasts (in millions of…

A: The rate that a business should pay, on average, to each of its security holders in order to fund…

Q: You need to estimate the value of Laputa Aviation. You have the following forecasts (in millions of…

A: The rate that a business should pay, on average, to each of its security holders in order to fund…

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: You are considering an investment in Fields and Struthers, Inc., and want to evaluate the firm's…

A: To increase production capacity, boost operational effectiveness, or advance technology, businesses…

Q: You just bought an asset with a straight line depreciation of $6200 per year for the next 8 years.…

A:

Q: You need to estimate the value of Laputa Aviation. You have the following forecasts (in millions of…

A: Here,Weight of Equity50%Weight of Debt50%Cost of Equity16%Cost of Debt7%Tax Rate30%Year1234EBITDA $…

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: Suppose you sell a fixed asset for $99,000 when its book value is $75,000. If your company's…

A: The fixed assets are reflective of all such assets which are helpful for company in the deriving the…

Q: You need to estimate the value of Laputa Aviation. You have the following forecasts (in millions of…

A: 1234EBITDA$87$107$122$127Depreciation$17$27$32$37Pretax profit$70$80$90$90Tax…

Q: Smiley’s Manufacturing Company is considering the purchase of a small business, J&R Raw Material…

A: As per bartleby guidelines, "Since you have posted a question with multiple sub-parts, we will solve…

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: Using the following information, and a tax rate of 35%, calculate the yearly cash flow: Sales…

A: Income before tax = Sales - Variable costs - Fixed costs - Depreciation Income before tax = $2,100 -…

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: A corporation with a 27% combined income tax rate is considering the following investment in…

A: Internal rate of Return:   IRR is the annual rate of growth an investment is expected to generate.…

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: Calculate a firm's free cash flow if it has net operating profit after taxes of R60,000,…

A: Free cash flow to the firm (FCFF) represents the cash flow from operations available for…

Q: Harper Corporation recently sold a used machine for $50,000. The machine had a book value of $75,000…

A: The Loss or Gain on a machine is computed by comparing the purchase price to its Netbook value. A…

Q: Suppose you own a business and you expect to generate a profit of $50,000 next year. Each year after…

A: The present value of the company's valuation is the present value of all cash flows that are…

Q: A company with a Tax Rate of 22% is going to sell a fixed asset with a Book Value of $134,000 for a…

A: The value at which a company disposed of its used assets is term as the salvage value.

Q: 3. Assume a firm has earnings before depreciation and taxes of $500,000 and no depreciation. It is…

A: Earning before depreciation and taxes        $500,000 Depreciation…

Q: Based on a company's present value of 13.62 billion dollars, how can i calculate what would be a…

A: PV= 13.62 billion dollars n= 3 years r= not given   PV = FV/(1+r)n PV = Present value, also known as…

Q: You have invested $10,000 in this ETF at the beginning of year 2020 and its year-end value was…

A: Rate of return refers to the return earned on an investment or asset over a fixed period of time.…

Q: Tubby Toys estimates that its new line of rubber ducks will generate sales of $6.40 million,…

A: Operating Cash Flow (OCF) is a measure of the cash generated or used by a company's operations…

Q: You are considering an investment in Fields and Struthers, Inc., and want to evaluate the firm’s…

A: Free cash flows refer to the cash generated by the business organization from its operational…

Q: Calculate the FCF for a firm if it has operating cash flows of 500, CAPEX of 320, and a change in…

A: Given: Operating cash flow = 500CAPEX = 320Change in NWC = -18The free cash flow (FCF) can be…

Q: A3) Finance You purchase an asset for $1,000,000. Three years later you sell the asset for $300,000.…

A: TAX: A tax is a mandatory financial charge or other sort of levy imposed on a taxpayer by a…

Q: Consider a firm with a contract to sell an asset for $151,000 four years from now. The asset costs…

A: Selling value =$ 151000Present Value =$ 96000Period = 4 YearsInterest Rate = 13%Profit / (Loss ) =…

Q: Calculate the FCF for a firm if it has operating cash flows of 800, CAPEX of 280, and a change in…

A: Free cash flow is a company's cash flow of money after deducting all operational costs, capital…

Q: Suppose Hampton Corporation sells land for $8,000,000. Hampton paid $5,000,000 for the land several…

A: After-tax cash flow is the amount that is arrived after net of taxes paid on the receipt of any…

Q: Assume Lasher’s Kitchen has pretax earnings of $150,000 after depreciation expense of $30,000. If…

A: Cash flow speaks to the development of cash in and out of a commerce, showing its money related…

Q: Die Hard Corp.'s net income for the year was $23M. Its interest expense was $7M and its depreciation…

A: Operating cash flow is a measure of company's financial  performance it is the amount generated from…

Q: Mojave Corporation was looking at an investment that would generate $5,000 in net income before…

A: WORKING NOTE  1) tax @21%(3000*21%)=630

Q: Nokela Industries purchases a $ 38.8 million cyclo-converter. The cyclo-converter will be…

A: Depreciation and its tax shield do not affecct the cash flows directly but it have an indirect…

Q: You are considering an investment in Fields and Struthers, Inc., and want to evaluate the firm's…

A: NOPATC [Net operating profit after tax] shows operating income after tax without considering any…

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: You plan on buying a bottling machine for $2 llion, which can be salvaged for $400,000 in 8 ars.…

A: CCA is a capital cost deduction like depreciation and takes advantage of tax deductions and hence…

Q: You are considering an investment in Fields and Struthers, Inc., and want to evaluate the firm's…

A: The objective of the question is to calculate the NOPAT operating cash flow, NOPAT investment in…

Conversion Cycle

Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.