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Looner Industries is currently analyzing the purchase of a new machine that costs $160,000 and requires $20,000 in installation costs. Purchase of this machine is expected to result in an increase in net working capital of $30,000 to support the expanded level of operations. The firm plans to depreciate the machine under MACRS using a 5-year recovery period and expects to sell the machine to net $10,000 before taxes at the end of its usable life. The firm is subject to a 40% tax rate.a. Calculate the terminal cash flow for a usable life of (1) 3 years, (2) 5 years, and (3) 7 years.b. Discuss the effect of usable life on terminal cash flows using your findings in part a.c. Assuming a 5-year usable life, calculate the terminal cash flow if the machine were sold to net (1) $9,000 or (2) $170,000 (before taxes) at the end of 5 years.d. Discuss the effect of sale price on terminal cash flow using your findings in part c.
Suppose Ford Motor Company sold an issue of bonds with a 10-year maturity, a $1,000 par value, a 10 percent coupon rate, and semiannual interest payments. a. Two years after the bonds were issued, the going rate of interest on bonds such as these fe..
1.the cougar corporation has issued 20-year semi-annual coupon bonds with a face value of 1000. if the annual coupon
examine applersquos current position on the companyrsquos ethical and social responsibilities and determine whether or
Complete a 2 page paper in APA format (plus cover sheet and reference page) that briefly describes the differences between formal and informal research. What are the benefits and the drawbacks? Provide examples of when might you use each type of r..
selected condensed data taken from a recent balance sheet of perkins inc. are as follows.perkins inc.balance sheet
Its estimated cost of equity is 16.4 percent. What is Morningside's corporate cost of capital?
suppose you find that prices of stocks before large dividend increases show on average consistently positive abnormal
Wexford Industrial Supply is considering a new project with estimated depreciation of $32,000, fixed costs of $36,000, and total sales of $73,500. The variable costs per unit are estimated at $5.00. What is the accounting break-even level of produ..
On 1/1/2015, Starburst Company issued 10-year bonds with a face value of $500,000 at 102. The bonds carry a stated interest rate of 7%, with interest payable semi-annually on January 1 and July 1. Starburst uses the straight-line method of amortiz..
How long would it take for S&S Air to pay off the smart loan assuming 30-year traditional mortgage payments?
A 10-year corporate bond has a yield of 9%. Assume that the liquidity premium on the corporate bond is 0.7%. What is the default risk premium on the corporate bond? Round your answer to two decimal places.
the inflation rate in the u.s. is 3 while the inflation rate in japan is 2. the current exchange rate is 1 equal to 78
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