What is the expected after-tax cash flow from selling a piece of equipment if Orange Oval Paint purchases the equipment today for $370,000, the tax rate is 10 percent, the equipment would be sold in 3 years for $111,000, and accelerated depreciation is used where the depreciation rates in years 1, 2, 3, 4, and 5 would be 35 %, 30%, 15%, 10%, and 10%, respectively? The answer is a positive number. Input instructions: Round your answer to the nearest dollar. The answer is a positive number. dollars

What is the expected after-tax cash flow from selling a piece of equipment if Orange Oval Paint purchases the equipment today for $370,000, the tax rate is 10 percent, the equipment would be sold in 3 years for $111,000, and accelerated depreciation is used where the depreciation rates in years 1, 2, 3, 4, and 5 would be 35 %, 30%, 15%, 10%, and 10%, respectively? The answer is a positive number. Input instructions: Round your answer to the nearest dollar. The answer is a positive number. dollars

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter12: Capital Budgeting: Decision Criteria

Section: Chapter Questions

Problem 17P: The Perez Company has the opportunity to invest in one of two mutually exclusive machines that will...

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Your new employer, Freeman Software, is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life, and the allowed depreciation rates for such property are 33.33%, 44.45%, 14.81%, and 7.41% for Years 1 through 4. Revenues and other operating costs are expected to be constant over the project's 10-year expected life. What is the Year 1 cash flow? Equipment cost (depreciable basis) $65,000 Sales revenues, each year $60,000 Operating costs (excl. deprec.) $25,000 Tax rate 25.0% a. $36,869 b. $31,849 c. $35,114 d. $31,666 e. $33,442
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Moving to another question will save this response. Question 3 What is the expected after-tax cash flow from selling a piece of equipment if XYZ purchases the equipment today for $89,700.00, the tax rate is 30.00%, the equipment is sold in 3 years for $16.000.00, and MACRS depreciation is used where the depreciation rates in years 1, 2, 3, and 4 are 40.00%, 35.00%, 20.00%, and 5.00%, respectively? O $3,140 (plus or minus $10) O $12,546 (plus or minus $10) O $11,200 (plus or minus $10) O $1,031 (plus or minus $10) O None of the above is within $10 of the correct answer Question 3 of 10
What is the annual net cash flow?
Riverton Silver is considering buying a new extraction system. The new extraction system would be purchased today for $56,300.00. It would be depreciated straight-line to $0 over 2 years. In 2 years, the extraction system would be sold for an after-tax cash flow of $3,060.00. Without the extraction system, costs are expected to be $97,800.00 in 1 year and $124,000.00 in 2 years. With the extraction system, costs are expected to be $75,000.00 in 1 year and $36,700.00 in 2 years. If the tax rate is 48.00% and the cost of capital is 18.71%, what is the net present value of the new extraction system project? -$1,764.29 (plus or minus $10) $9,043.41 (plus or minus $10) -$749.34 (plus or minus $10) -$16,928.65 (plus or minus $10) None of the above is within $10 of the correct answer
Palmer Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in net income after tax of $164,900. The equipment will have an initial cost of $485,000 and have a 7 year life. If the salvage value of the equipment is estimated to be $9,000, what is the accounting rate of return? Multiple Choice 34.00% 23.28% 156.37% 51.11%
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