Determine what are operating cash flows in the first year
Course:- Financial Econometrics
Reference No.:- EM13334928

Assignment Help
Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
Assignment Help >> Financial Econometrics

Your company plans to produce a product for two more years and then to shut down production. You are considering replacing an old machine used in production with a new machine. The Old machine originally cost $ 363 and was bought Three (3) years ago (i.e. it has depreciated for three years). It could be sold today for $ 78 or sold in two years for $ 26 . The New machine would cost $ 467 and could be sold in two years for $ 213 . The new machine is more efficient than the old machine and would reduce waste, and therefore the cost of materials, by $ 12 per year. Due to the lower waste, we could also have a one-time reduction in inventory of 32 . The firm's tax rate is 40 %. Both machines are in the 4 year MACRSclass, with depreciation amounts of 33%, 45%, 15% and 7%. What are the Operating Cash Flows in the first year (Year1) with the new machine?

Put your comment

Ask Question & Get Answers from Experts
Browse some more (Financial Econometrics) Materials
Which is the amount that should be paid for a stock that will pay a dividend of $4.65 in one year and $5.38 in two years. After that, the stock price will grow at a constant
How does purchasing car insurance and homeowner's insurance help protect and maintain your wealth?- How does purchasing sufficient health insurance and disability insurance he
Miiler Manufacturing has 4 million shares of commonstock outstanding. The currentshare price is $76, and the book value per share is $5. Filer Manufacturing also has two bon
ou want to buy a new sports car from Muscle Motors for $73,000. The contract is in the form of a 60-month annuity due at a 7.00 percent APR. What will your monthly payment b
Technical Sales, Inc. has 6.6 percent coupon bonds on the market with 9 years left to maturity. The bonds make semiannual payments and currently sell for 92.5 percent of par
Which is the value of Overland common stock. Overland has just paid a dividend of $2.39. These dividends are expected to grow at a rate of 3.8% in the foreseeable future.
Fit a least squares linear regression model for FPower against GasSpot and SDTemp using data in TRG. - Compare the numerical results obtained with the various methods, and ex
A corporation expects to have earnings available to common shareholders (net profits minus preferred dividends) of $1,000,000 in the coming year. The firm plans to pay 40 pe