Should artistic purchase the machine

Assignment Help Finance Basics
Reference no: EM131394443

Artistic Adobes is considering growing its business by adding a paint machine that costs $90,000. The machine will generate an additional $29,800 in before-tax operating income (excluding depreciation) for the next five years. At the end of five years, the machine can be sold for $8,000. The machine falls into the MACRS 3-year class. Artistic's marginal tax rate is 34 percent, and its required rate of return is 15 percent. Should Artistic purchase the machine?

Reference no: EM131394443

Questions Cloud

Compute the project’s net present value (npv) : Piping Hot Food Services (PHFS) is evaluating a capital budgeting project that costs $75,000. The project is expected to generate after-tax cash flows equal to $26,000 per year for four years. PHFS's required rate of return is 14 percent.
Provide a detailed security plan for the ci sector : Provide a detailed Security plan for the CI Sector, from Technical security perspective - write a paper on how you would secure sector from an attack.
What amount of safety stock is appropriate : ACCT 111 Assignment. A company makes T-shirts used by local gyms. Fabric is the primary raw material. Demand is onstant but the lead time for getting fabric can vary. What amount of safety stock is appropriate
Which would be more unusual a steer weighing or one weighing : How many standard deviations from the mean would a steer weighing 1000 pounds be?- Which would be more unusual, a steer weighing 1000 pounds or one weighing 1250 pounds?
Should artistic purchase the machine : The machine falls into the MACRS 3-year class. Artistic's marginal tax rate is 34 percent, and its required rate of return is 15 percent. Should Artistic purchase the machine?
Evaluate the companys weighted average cost of capital : Given the following information on Big Brothers, Inc. capital structure, compute the company's weighted average cost of capital (WACC). The company's marginal tax rate is 40%.
Draw the model for given iq scores : Draw the model for these IQ scores. Clearly label it, showing what the 68 - 95 - 99.7 Rule predicts about the scores.- In what interval would you expect the central 95% of IQ scores to be found?
Should the old machine be replaced : If the new machine is purchased, Emotion plans to sell it in three years for $6,000. The firm's marginal tax rate is 40, and its required rate of return is 11 percent. Should the old machine be replaced?
Draw the model for auto fuel economy : Draw the model for auto fuel economy. Clearly label it, showing what the 68 - 95 - 99.7 Rule predicts about miles per gallon.

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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