Reference no: EM131404820
Assignment
Please solve the problems below and share your solution in this discussion thread. Please provide your detailed calculations (either pasted into your response directly or as an attachment in Excel). Note that the goal of this discussion is to benefit from peer learning on the calculations. If you don't know the answer, please give it your best attempt and post your solution. (Your grade on the discussion is related your effort and contribution to the discussion and is not dependent on having solved the problem correctly initially.)
Your company is considering acquiring a new machine. The base price of the machine is $235,000. It would cost $25,000 more to install the machine and make appropriate customizations. The accounting department said these costs can be depreciated in a straight-line manner based on an economic life for the machine of 5 years. After 3 years the machine will be sold for $120,000. Purchasing this machine would require an increase in net working capital of $12,500. The machine would have no effect on revenues, but would likely save the company $75,000 per year in before-tax operating costs. The company's marginal tax rate is 40%.
1. What is the Year 0 (initial) cash flow?
2. What are the net operating cash flows during the life of the project (Years 1, 2 and 3)?
3. What is the end-of-project cash flow (i.e., the after-tax salvage and the return of working capital)?
4. If the project's cost of capital is 9%, should the machine be purchased?
Please explain, and show formula, on how you got answers.
|
Explain economic legal and regulatory forces and trends
: Identify economic, legal, and regulatory forces and trends. Identify the major issues and/or opportunities that the company faces based on your analysis.
|
|
Describe the contents of a writing that would be sufficient
: Describe the contents of a writing that would be sufficient to satisfy the statute of frauds under the common law. List the kinds of contracts that require a writing under the statute of frauds.
|
|
Research the falcon northwest fragbox
: Manufacturers are releasing a number of systems that are trying to capitalize on size- or the lack of size! Explore some of the small form factor (SFF) computers appearing on the market.
|
|
What is the y intercept for given relationship
: What is the y-intercept for this relationship? Does it have a useful meaning in this situation? Explain. - Give the value of the slope, and interpret what in means in this situation.
|
|
What are the net operating cash flows during life of project
: What are the net operating cash flows during the life of the project (Years 1, 2 and 3)? What is the end-of-project cash flow (i.e., the after-tax salvage and the return of working capital)?
|
|
Research the advantages of windows and mac
: Your parents are getting you a new computer. Decide whether you want a desktop, notebook, or netbook and then describe how the choice may impact the operating system you get.
|
|
What is the residual for given person
: What is the residual for this person? Explain what the residual tells you about this person's body temperature in comparison to the average body temperature for someone his age.
|
|
Sketch an approximate facsimile of your resulting graph
: Make the plot such that if the outlier were removed, the correlation for the remaining points would be between -0.2 and +0.2. Sketch an approximate facsimile of your resulting graph.
|
|
Explain a history on the organization to include key factors
: why you have chosen the organization, the organization's significance in your life, a brief history on the organization to include key factors that are relevant in future sections of the paper
|