Your firm needs a computerized machine tool lathe that costs $50,000 and requires $12,000 in maintenance for each year of its three-year life.  After three years, this machine will be replaced.  The machine falls into the MACRS three-year class life category, and neither bonus depreciation nor Section 179 expensing can be used.  Assume a tax rate of 21 percent and a discount rate of 12 percent.  If the lathe can be sold for $5,000 at the end of year three, what is the after-tax salvage value

Q: McPherson Company must purchase a new milling machine. The purchase price is $50,000, including…

A:

Q: You are considering investing in a piece of equipment to implement a cost-cutting reduction is…

A: PI index is profitability index and calculated as the ratio of present value of cash flow and…

Q: You are debating on purchasing a limo for the use of the executive team. The purchase price would be…

A: Net present value is present value of cash inflows minus present value of cash outflows. In the…

Q: Marshall-Miller & Company is considering the purchase of a new machine for $50,000, installed. The…

A: We can find the after-tax salvage value at the end of Year 4 by calculating the depreciation expense…

Q: Marshall Miller & Company is considering the purchase of a new machine for $50,000, instated. The…

A: An asset's projected or estimated worth at the end of its useful life, net of any taxes, is its…

Q: Acefacto Inc., has asked for you to calculate the after-tax salvage value of an asset it plans on…

A: Data given: Sale price=$595,641 Book value after 10 years=$670,000 Tax rate=31%

Q: Your firm needs a computerized machine tool lathe which costs $80,000, will generate $50,000…

A: Step 1: analyze first the problem.. Step 2: depreciation methods are. Straight line method, double…

Q: Ilana Industries Incorporated needs a new lathe. It can buy a new high-speed lathe for $1.1 million.…

A: Net present value is the most important capital budgeting methods used and is based time value of…

Q: Daily Enterprises is purchasing a $10.58 million machine. It will cost $74,461.00 to transport and…

A: Net present value (NPV) is the difference  between present value of all cash inflows and initial…

Q: Your firm needs a computerized machine tool lathe which costs $55,000 and requires $12,500 in…

A: Depreciation Tax Shield: It is possible to reduce taxable income by using a depreciation tax shield,…

Q: Your company has purchased equipment (for $50.000) that will reduce materials and labor costs by…

A: Breakeven period The breakeven period for any investment is the period required to make the initial…

Q: A project has to sell a machine that is obsolete. The market department finds a buyer who is willing…

A: The book value of an asset is the original cost of the asset less accumulated depreciation of the…

Q: Your firm needs a computerized machine tool lathe which costs $59,000 and requires $12,900 in…

A: After tax salvage value can be calculated using this formula: After tax salvage value = selling…

Q: Your firm needs a machine which costs $220,000, and requires $37,000 in maintenance

A: MACRS (Modified Accelerated Cost Recovery System) is a system used to calculate tax deduction of…

Q: A company is considering the purchase of a new machine for $50,000, installed. The machine has a tax…

A: For evaluating any new asset or project, cashflows are considered. For overall evaluation cashflows…

Q: Your firm needs a machine which costs $280,000, and requires $43,000 in maintenance for each year of…

A: After Tax salvage value is that amount which is received by the investor from selling the assets…

Q: You are considering buying a new tractor that costs $275,000 that is expected to last five years.…

A:

Q: A developer is deciding whether to purchase some heavy-duty landscaping equipment. The alternative…

A: Computation:

Q: b) You purchase equipment for $50,000 and it costs $5,000 to have it delivered and installed. Based…

A: The value of a tax shield is simply the corporate tax rate multiplied by the cost of debt multiplied…

Q: Fox Hollow Franks is looking at a new system with an installed cost of $540,000. This equipment is…

A: Net present value refers to the method of capital budgeting which is useful investors in evaluating…

Q: Elder, Inc. is considering the purchase of a new air-handling system that will have no effect on…

A: Savings means the amount which a firm earns by installing a new plant or project. The project which…

Q: Celtic Inc. is considering a 16-year project that will generate before tax cash flow of $18, 000 per…

A: Step-1

Q: Animals, Inc. is considering a machine that will cost $18,000 and which can be sold after 3 years…

A: Net present value refers to the method of capital budgeting used for estimating the difference…

Q: A corporation is considering purchasing a machine that will save $200,000 per year before taxes. The…

A: The net present value is the difference of the present value of cash inflows and the present value…

Q: Johnny Dear Inc. is examining the possibility of purchasing harvesting machinery for $147,500 that…

A: Under the capital budgeting technique, different projects are evaluated on the basis of different…

Q: Fort requires equipment costing $320,000.  It is a  9-year project, and is depreciated straight line…

A: cost of equipment= $320,000 life span of the project= 9 years  Sales generated= $189,000  cost=…

Q: The Campbell Company is considering adding a robotic paint sprayer to its production line. The…

A: The capital budgeting process is one that is helping the company to evaluate projects and then take…

Q: The Jackson Company has the opportunity to invest in one of two mutually exclusive machines that…

A: YearsMachine AMachine…

Q: Michelle Amabo Company is planning to buy a new machine that can produce additional 20,000 units  of…

A: Annual net cash inflows from the new machine=Net Income+Depreciation Expense

Q: are considering investing in a piece of equipment to mplement a cost-cutting proposal. The pre-tax…

A: PI index is profitability index and calculated as the ratio of present value of cash flow and…

Q: We must evaluate a proposal to buy a new milling machine. The purchase price of the milling machine,…

A: Projects cash flows at year 0 will be the sum of the following Cash flows year 0 =Purchase price…

Q: A new delivery truck can be purchased for $30,000. The old one could be sold today for $5,000, and…

A: Cost of new truck = $30,000Sold today = $5,000Book value = $3,000Tax rate = 21%Savings =…

Q: what is the after tax salvage value?

A: Information Provided: Initial costs = $190,000 Maintenance costs = $34,000 Life = 3 years…

Q: Your firm needs a computerized tool lathe which cost $49000 and requires $119000 in maintenance for…

A: Given information: Cost of computerized tool is $49,000 Maintenance cost is $119,000 Tax rate is 34%…

Q: Builtrite is considering purchasing a new machine that would cost $60,000 and the machine would be…

A: TCF = Selling price - book value - Tax.

Q: Am. 140.

A: To determine whether XYZ Manufacturing should purchase the new machine, we'll conduct a Net Present…

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.