After tax salvage value-asset has an acquisition cost

Assignment Help Financial Management
Reference no: EM131044080

An asset used in a four-year project falls in the five-year MACRS class for tax purposes. The asset has an acquisition cost of $6,010,000 and will be sold for $1,210,000 at the end of the project. If the tax rate is 30 percent, what is the after tax salvage value of the asset? Refer to Table 8.3. (Enter your answer in dollars, not millions of dollars (e.g., 1,234,567). Do not round intermediate calculations and round your final answer to 2 decimal places (e.g., 32.16).) 

Reference no: EM131044080

Questions Cloud

Demonstrate ability to generate a thesis : This section may vary in length and will demonstrate your ability to generate a thesis, which specifically narrows down your chosen topic of interest. Your thesis is your main statement of purpose and will be the driving force in your final paper...
Develop a process map about prescription filling process : Develop a process map about the prescription filling process for HMO's pharmacy, in which you specify the key problems that the HMO's pharmacy might be experiencing. Next, use the supplier, input, process steps, output, and customer (SIPOC) model ..
What must the coupon rate be on the bonds : Essary Enterprises has bonds on the market making annual payments, with twelve years to maturity, a par value of $1,000, and selling for $960. At this price, the bonds yield 6.5 percent. What must the coupon rate be on the bonds?
What is the projects NPV : Down Under Boomerang, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2.52 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time i..
After tax salvage value-asset has an acquisition cost : An asset used in a four-year project falls in the five-year MACRS class for tax purposes. The asset has an acquisition cost of $6,010,000 and will be sold for $1,210,000 at the end of the project. If the tax rate is 30 percent, what is the after tax ..
Find power dissipated in resistor : Two coils A and B are mutually coupled so that 55% of the flux of Coil A links Coil B. It is found that current of 2A produces a flux of 0.04 mWb in coil A while the same current in B creates in it flux of 0.05 mWb. If Number of turns are 1000 and 13..
Estimate the six month euro interest rate : The current USD/euro exchange rate is 1.09939 dollar per euro. The six month forward exchange rate is 1.10785. The six month USD interest rate is 0.46% per annum continuously compounded. Estimate the six month euro interest rate.
What is the internal rate of return of this project : A research division of a large consumer electronics company has developed a new type of mp3 player. The production costs in the current period will be $1,399,100. The new product will produce a cash flow of $500,000 a year for 4 consecutive years beg..
What is expected total return and what is dividend yield : Consider Ford stock (F) with a current price of $20 per share and a standard deviation of returns of 15%. An investor expects to sell Ford stock in one year at $21 per share and expects the firm to pay a dividend of $1 per share at the end of the yea..

Reviews

Write a Review

 

Financial Management Questions & Answers

  What is the present value of the savings

Your company will generate $57,000 in annual revenue each year for the next seven years from a new information database. If the appropriate interest rate is 7.8%, what is the present value of the savings?

  Call premium plus put premium

An Asset currently trades at price S0. Let V0 be the current price (call premium plus put premium) of an at-the-money straddle on A expiring in one month. You have an initial capital amount of C0 and execute the following strategy. - keep C in cash w..

  The expected return on the portfolio

You own a portfolio that is 33 percent invested in Stock X, 48 percent in Stock Y, and 19 percent in Stock Z. The expected returns on these three stocks are 9 percent, 12 percent, and 14 percent, respectively. What is the expected return on the portf..

  The real risk-free rate and inflation is expected

The real risk-free rate is 4%. Inflation is expected to be 2% this year and 4% the next two year. Assume that the maturity risk premium is zero. What is the yield on 2-year Treasury securities? What is the yield on 3-year Treasury securities?

  What is the capital gain or loss on your bond

You own a bond with the following features: 9 years to maturity, face value of $1000, coupon rate of 2% (annual coupons) and yield to maturity of 1.1%. Just after you purchase the bond, the yield to maturity rises to 5.4%. What is the capital gain or..

  Interest had compounded annually

Thomas invests $121 in an account that pays 6 percent simple interest. How much money will Thomas have at the end of 4 years? Beatrice invests $1,430 in an account that pays 5 percent simple interest. How much more could she have earned over a 6-year..

  What is monthly savings that realize by refinancing

John took a mortgage loan 5 years ago for $120,000 at 7% interest for 15 years, to be paid in monthly payments. Now, a lender is offering him a new mortgage loan at 5% for 10 years. What is the total financing cost (not include the loan amount itself..

  The bonds make semiannual payments

Stone Sour Corp. issued 20-year bonds 6 years ago at a coupon rate of 7.30 percent. The bonds make semiannual payments. If these bonds currently sell for 103 percent of par value, what is the YTM? (Round your answer to 2 decimal places. (e.g., 32.16)..

  Land conservation easement that allows agricultural

Assume you are a shareholder in a corporation that owns a parcel of real estate that is restricted by a land conservation easement that allows agricultural use only. The corporation rents the land to a farmer.

  Cost of casa de diseno''s operational inefficiency

In terms of resource investment requirements, what is the cost of Casa de Diseno's operational inefficiency - what annual savings will result, assuming the sales remain constant?

  Participate in money-and bond markets and equity securities

How institutional investors and individuals participate in money, stock, and bond markets, and equity securities?

  Questions regarding financial management

Explain what the information needs of various stakeholders are for their respective decision making needs.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd