Calculate the net after-tax cash flows from this investment

Assignment Help Other Subject
Reference no: EM13272939

The law firm of Bushmaster, Cobra, and Asp is considering investing in a complete small business computer system. The initial investment will be $50,000. The computer is in the 5-year MACRS category, and the firm's tax rate is 34%. The computer system is expected to provide additional revenue of $32,000 per year for the next six years and to reduce expenses by $7,000 per year for the same period.

a) Calculate the net after-tax cash flows from this investment.

b) Calculate the net present value of the system, given that the law firm's weighted average cost of capital is 12%.

c) Should they buy the computer system?

Reference no: EM13272939

Questions Cloud

Cash flow payback : Cash flow payback
School-related obstacles : What can teachers and schools do to overcome each of the school-related obstacles and problems that contribute to low achievement among economically disadvantaged students? What might you accomplish in working to overcome these obstacles and solve th..
Use psychological crime theories : If we use psychological crime theories to find a crime prevention measure to deal with violent criminals then what would that prevention measure be?
What is community social responsibility : What is Community social responsibility? What is the importance of community relations expectations for a company?
Calculate the net after-tax cash flows from this investment : Calculate the net after-tax cash flows from this investment. Calculate the net present value of the system, given that the law firm's weighted average cost of capital is 12%.
Development in a chronological narrative : Discuss, tracing the development in a chronological narrative that identifies the main turning-points of the women's movement in the 1970's, the main forces for change, the major reforms that were accomplished (and those that were sought but not achi..
Employers look for is the ability to solve problems : Problem Solving Skills and Application: One of the top things that employers look for is the ability to solve problems. This module will present a few popular problem solving ideas and then give you some case studies on how to apply these new skills.
What is the cause of a shift in a good''s supply curve : What is the cause of a shift in a good's supply curve?
Alaska north slope crude oil : Assuming you currently have 10,000 Bbls of WTI crude, the added benefit (cost) to you if you were to sell the 10,000 Bbls of WTI crude and use the proceeds to purchase and refine ANS crude is closest to:

Reviews

Write a Review

 

Other Subject Questions & Answers

  What pressure is needed to isothermally compress ice

What pressure is needed to isothermally compress ice initially at - 5oC and 1 bar so that it changes phase?

  How were disputes resolved before this system

Have you considered why we have the laws and court system we have today? Around 1066 AD, the Normans, newly dominant in England, established a system of justice for those who felt themselves wronged (primarily local war lords) to go to the court o..

  What is identity theft

What is identity theft? How can identities be stolen? What can be done to reduce the impact of identity theft on victims?

  What does proportional representation means

Proportional representation means that the candidate who gets the most votes in an election wins.  party that gets 51 percent takes all of the available seats. number of seats a party gets is in proportion to its percentage of the vote.

  Earth-moon system orbits sun covering 30 degrees per month

The fact that the earth-moon system orbits the sun covering 30 degrees per month while the moon orbits the earth means that, compared to one lunar orbital period, the time between succesive full moons (the synodic month)is?

  Theories explaining the interest group behavior

Discuss the major theories that help explain interest group behavior and how these theories manifest themselves in the policy making process.

  Original optimal solution definitely will still be optimal

Comment on the truthiness of following statement: “If the sum of the percentage changes do not exceed 100% then the original optimal solution definitely will still be optimal.”

  Impact of the reagan revolution on federalism

What was the impact of the Reagan Revolution on federalism and on the public's perception of the role of government?

  Briefly explain darwin''s idea of natural selection

Briefly explain Darwin's idea of natural selection. Why was this theory disbelieved by previous naturalists and why does Darwin feel it will now be given serious consideration?

  Court trial proceedings

There are certain circumstances. List and explain these circumstances. Is there any case law that allows a trial to proceed withoutthe accused person? List and explain at least two cases.

  Explain twain-s adventures of huckleberry finn

He becomes side character as Tom dominates. Do you agree with critics or not? If you do agree, describe why using examples from novel. If not, then describe why not.

  Cognitive-gestalt-evolutionary psychology perspectives

Give a short Comparison and Contrast of these 3 Psychological perspectives:

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