subject
Business, 24.04.2020 01:18 EmmaKozlewski4907

Tundra Tots is evaluating the proposed acquisition of new equipment at a cost of $250,000. In addition the equipment would require modifications at a cost of $20,000 plus shipping costs of $3,000. The equipment falls into the MACRS 3-year class, and will be sold after 3 years for $25,000. The equipment would require increased inventory of $4,000. The equipment is expected to save the company $25,000 per year in before-tax operating costs. The company's marginal tax rate is 30 percent and its cost of capital is 11 percent.

a. What is the cash outflow at Time 0?
b. What are the net operating cash flows in years 1, 2, and 3?
c. Calculate the non-operating terminal year cash flow.
d. Calculate net present value. Should the machine be purchased?

ansver
Answers: 1

Another question on Business

question
Business, 22.06.2019 06:40
At april 1, 2019, the food and drug administration is in the process of investigating allegations of false marketing claims by hulkly muscle supplements. the fda has not yet proposed a penalty assessment. hulkly’s fiscal year ends on december 31, 2018. the company’s financial statements are issued in april 2019. required: for each of the following scenarios, determine the appropriate way to report the situation. 1. management feels an assessment is reasonably possible, and if an assessment is made an unfavorable settlement of $13 million is reasonably possible. 2. management feels an assessment is reasonably possible, and if an assessment is made an unfavorable settlement of $13 million is probable. 3. management feels an assessment is probable, and if an assessment is made an unfavorable settlement of $13 million is reasonably possible. 4. management feels an assessment is probable, and if an assessment is made an unfavorable settlement of $13 million is probable.
Answers: 1
question
Business, 22.06.2019 09:30
When you hire an independent contractor you don't have to pay the contractors what
Answers: 3
question
Business, 22.06.2019 11:30
17.     chef a says that garnish should be added to a soup right before serving. chef b says that garnish should be cooked with the other ingredients in a soup. which chef is correct? a. chef a is correct. b. both chefs are correct. c. chef b is correct. d. neither chef is correct. student c   incorrect which is correct answer?
Answers: 2
question
Business, 22.06.2019 12:30
Acorporation a. can use different depreciation methods for tax and financial reporting purposes b. must use the straight - line depreciation method for tax purposes and double declining depreciation method financial reporting purposes c. must use different depreciation method for tax purposes, but strictly mandated depreciation methods for financial reporting purposes d. can use straight- line depreciation method for tax purposes and macrs depreciation method financial reporting purposes
Answers: 2
You know the right answer?
Tundra Tots is evaluating the proposed acquisition of new equipment at a cost of $250,000. In additi...
Questions
question
Mathematics, 11.01.2020 08:31
Questions on the website: 13722367