Suppose you sell a fixed asset for $212,000 when its book value is $112,000. If your company’s marginal tax rate is 30 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: Krypton Engineering expects to have net profit next year of $28.18 million and free cash flow of…

A: a.Next year net income = $28.18 millionFree cash flow = $22.18 millionTax rate = 40%Increase in…

Q: Sheffield Corp. reported the following for 2022: Income tax expense $68000 Contribution margin…

A: Introduction: Controllable cost is a variable cost that may be adjusted based on a business decision…

Q: What is the payback if the investment is $22,000 and the after tax benefits are: Years 1 & 2 =…

A: Investment amount = $ 22,000

Q: In the next year, a company has pre-tax earnings that will either be €80 or €400 with equal…

A: Risk management refers to the strategic measures taken by the company to eliminate uncertainty in…

Q: Calculate the annual tax factor benefit or savings from an annual depreciation of $20,000 if you are…

A: Annual depreciation = $ 20,000 Tax rate = 28%

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: 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: Assume that a farmer has $157,500 in total assets and 102,600 in total debt faces 20% income tax…

A: The interest rate is the percentage at which a lender charges a borrower for the use of money or…

Q: Suppose that you are attempting to value an income-producing property using the direct…

A: Direct capitalization is a valuation metric that uses the project's income as an indicative of the…

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

A:

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: 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: 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: What is the rate-of-return on assets if the growth rate is 9.5%?

A: retained earnings = 90500*(1-15%) = 76925   net income = 76925*(1+9.5%)= 84232.875

Q: Your company has sales of $106,400 this year and cost of goods sold of $62.900. You forecast sales…

A: Sales Less variable cost is cost of goods sold Whereas cost of goods sold as a percentage of sales…

Q: You are preparing to produce some goods for sale You will sell them in one year and you will incur…

A: For calculation of sell price we will use time value of money concept where future value of the…

Q: A company has purchased a new piece of machinery for $100,000. The estimate it will result in annual…

A: Capital budgeting is the process of evaluating and selecting long-term investments that will benefit…

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: In order to finance a new project, a company borrowed $4,000,000 at 8% per year with the stipulation…

A: a) Calculation of cost of debt before taxes

Q: firm is in the 25% marginal tax bracket. 1. If the firmis fully equity-financed, what is its value?…

A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: 2. If an after-tax rate of return of 10% is required, and the effective tax rate is 30%, what is the…

A: After tax rate of return = Before tax rate of Return X (100% - tax rate)

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: Suppose that Sudbury Mechanical Drifters is proposing to invest $80 million in a new factory. It can…

A: Present Value of Depreciation Tax Shield = Annual Depreciation Tax shield * Present Value Annuity…

Q: A firm will report annual Net Income of $50 and depreciation expense of $20 forever in the future.…

A: Tax shield refers to the reduction of tax liability due to tax allowable expenses. Tax allowable…

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: A lump-sum payment of $1,040,000 right now, in which case 45% will be deducted for taxes. We do not…

A: The current worth of the amount that can be invested further for certain period of time with given…

Q: What effect would a$9.85 million operating expense have on this​ year's earnings? What effect would…

A: Information Provided: Tax rate = 25% Operating expense = $9.85 million

Q: If a company invests $100 million today which will not produce any impact in the near future, but…

A: The 100million investment can be considered as a capital expenditure that would be depreciated or…

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: Southland Inc is considering a project that results in the following after-tax cash flows:  t = 0:…

A:

Q: non-dividend paying financial asset has a price of $200 and a oneyear future on this asset has price…

A: When a security is bought in one market and then sold at a higher price in another market, this is…

Q: QUESTION. If the sales are forecasted to be $3,850,000 in 2021 for Andrew Group, which is financial…

A: The income statement shows the profitability of the entity, it reported the profit or loss for a…

Q: Happy Time Inc. is expected to generate the following cash flows for the next year, as shown in the…

A: The expected return is the estimation of profit or loss that an investor determine from his…

Q: An A firm has sales of $10 million, variable costs of $4 million, fixed expenses of $1.5 million,…

A: formula for DOL, DFL and DCL DOL=contibutionEBIT=sales - variable costsales - variable cost - fixed…

Q: You are valuing a company that had sales of £ 80000 in 2021 and the expected year-on-year growth…

A: Free cash flow is cash flow available after the deductions of all expenses including capex and…

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: 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: 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: Given an asset with a net book value (NBV) of $35,000. a. What are the after-tax proceeds for a firm…

A: Gain or Loss on sale of assets is the difference between sales value of assets and net book value of…

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…

Q: assume that $1 one year from now is worth $0.90 today, and $1 two years from now is worth $0.75…

A: Present value is the concept that states an amount of money today is worth more than that same…