What is aftertax cash flow from the sale of this asset

Assignment Help Financial Management
Reference no: EM131333502

Consider an asset that costs $684,600 and is depreciated straight-line to zero over its seven-year tax life. The asset is to be used in a four-year project; at the end of the project, the asset can be sold for $135,300. (Do not round intermediate calculations.)

If the relevant tax rate is 35 percent, what is the aftertax cash flow from the sale of this asset? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

Aftertax salvage value _______$

Reference no: EM131333502

Questions Cloud

Suppose the spot and three-month forward rates : Suppose the spot and three-month forward rates for the yen are ¥79.10 and ¥78.56, respectively. What would you estimate is the difference between the annual inflation rates of the United States and Japan?
Based on the npv of the annual tax savings : Consider that you are purchasing an asset that you can either declare as an expense immediately in the first year for its full value or you can depreciate with 3-year MACRS (depreciation rates: 33.33%, 44.45%, 14.81%, and 7.41%). Then, from a purely ..
Essential to provide accurate valuation of firm : Financial ratios are essential to provide an accurate valuation of a firm. Select a publicly traded firm of your choice. You may use the firm you have elected to profile for the course-long Financial Analysis and Proposal assignment or a completely d..
Should the firm purchase the new machine : The Boyd Bottling Company is contemplating the replacement of one of its bottling machines with a newer and more efficient one. The old machine has a book value of $600,000 and a remaining useful life of five years. The company’s marginal tax rate is..
What is aftertax cash flow from the sale of this asset : Consider an asset that costs $684,600 and is depreciated straight-line to zero over its seven-year tax life. The asset is to be used in a four-year project; at the end of the project, the asset can be sold for $135,300. (Do not round intermediate cal..
True regarding camels and the basel accords : Which of the following is true regarding CAMELS and the Basel Accords?
Cost straight-line to zero over the project life : Romo Enterprises needs someone to supply it with 126,000 cartons of machine screws per year to support its manufacturing needs over the next five years, and you’ve decided to bid on the contract. It will cost you $930,000 to install the equipment nec..
What is the net present value of the project : A company wants to expand by buying another machine in order to produce more products. The machine will cost $27457 and installation costs are expected to be $4624. The machine is expected to generate incremental after-tax cash flows of $9903 in the ..
The relevant tax rate : Mullineaux Corporation has a target capital structure of 60 percent common stock, 5 percent preferred stock, and 35 percent debt. Its cost of equity is 14 percent, the cost of preferred stock is 6 percent, and the cost of debt is 8 percent. The relev..

Reviews

Write a Review

Financial Management Questions & Answers

  What is the cost of new common stock

Royal Mediterranean Cruise Line's common stock is selling for $22 per share. The last dividend was $1.20, and the dividends are expected to grow at a 5% annual rate. Flotation costs on new stock sales are 7% of the selling price. What is the cost of ..

  Considering the risk around the cost point estimate

Considering the risk around the cost point estimate, what type of contract will generally be used for the contracted effort?

  Issued bonds-what is the current yield on the bond

Wal-Mart has issued bonds with 7 years to maturity, a 7.5% coupon rate (paid semi annually), and $1,000 face value. If the price of the bond is $750, what is the current yield on the bond?

  Cost of capital assignment

Calculating Cost of Debt Gauss Corporation issued 20-year Bonds bearing a 9% coupon, payments made semiannually, 7 years ago. The bonds currently sells for 108 percent of par value. The company’s tax rate is 38 percent. The Book Value of this issue i..

  Increase marketing spending

Should Microsoft increase marketing spending? If so, by how much and where should it be allocated. Should online marketing spending and international marketing increase by more than print ads? Justify any additional spending that is recommended.

  Rather issue noncallable bonds than callable bonds

If a 10-year, $1,000 par, 10% coupon bond were issued at par, and if interest rates then dropped to the point where rd = YTM = 5%, we could be sure that the bond would sell at a premium above its $1,000 par value. Other things held constant, a corpor..

  Operating activities under the indirect method

If an asset is sold at a gain, why is the gain subtracted from net income when computing the net cash provided by operating activities under the indirect method?

  Raise some funds to pay for new equipment

The Flat Corporation needs to raise some funds to pay for new equipment. They issue $600,000 worth of 12-year bonds with semi-annual coupons at r(2)=10%. At the time of issue, interest rate in the market place are i(2)=9%. How much money did they rai..

  Determine the total dollar amount of your profit or loss

One year ago, you sold a put option on 200,000 Canadian dollars with an expiration date of one year. You received a premium on the put option of $.03 per unit. The exercise price was $1.11. Assume that one year ago, the spot rate of the The Canadian ..

  What is the initial investment outlay for spectrometer

You must evaluate a proposed spectrometer for the R&D department. The base price is $240,000, and it would cost another $60,000 to modify the equipment for special use by the firm. What is the initial investment outlay for the spectrometer, that is, ..

  What is the monthly difference in cost between the two

Based strictly on the monthly payments, is it better to buy or lease? What is the monthly difference in cost between the two?

  Foreseeable future-the real risk-free rate of interest

In the foreseeable future, the real risk-free rate of interest, r*, is expected to remain at 3%, inflation is expected to steadily increase, and the maturity risk premium is expected to be 0.1(t 1)%, where t is the number of years until the bond matu..

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