What is the after tax cash flow

Assignment Help Financial Management
Reference no: EM13763922

Rocky Top, Inc. purchased some welding equipment six years ago at a cost of $579,000. Today, the company is selling this equipment for $110,000. The tax rate is 35 percent. What is the after tax cash flow from this sale? The MACRS allowance percentages are as follows, commencing with year 1: 14.29, 24.49, 17.49, 12.49, 8.93, 8.92, 8.93, and 4.46 percent.

Reference no: EM13763922

Questions Cloud

What are the costs and benefits : Are there any good reasons to have Federal Reserve banks scattered around the country rather than having everything run by the Board of Governors in Washington, D.C.? What are the costs and benefits?
Markets efficiency-semi-strong or weak form of efficient : A stock market analyst is able to identify mispriced stocks by comparing the average price for the last 10 days to the average price for the last 60 days. If this is true, what do you know about the market’s efficiency? Is it Strong, Semi-Strong or W..
Option pricing model is employed to estimate the fair value : On January 1, 2008, PWC awarded stock options to two of its top managers, Price and Waterhouse. Price received options to purchase 25,000 shares of PWC $1 par common stock at an exercise price of $10/share. Waterhouse received 15,000 options to purch..
What is the after tax cash flow : Rocky Top, Inc. purchased some welding equipment six years ago at a cost of $579,000. Today, the company is selling this equipment for $110,000. The tax rate is 35 percent. What is the after tax cash flow from this sale? The MACRS allowance percentag..
What is the best estimate of the stocks current market value : Burke Tires just paid a dividend of D0 = $2.50. Analysts expect the company's dividend to grow by 30% this year, by 10% in Year 2, and at a constant rate of 5% in Year 3 and thereafter. The required return on this low-risk stock is 9.00%. What is the..
Equity requirement-what is the value of a property : If the equity requirement is 12 percent and a mortgage can be obtained for 25 years at 7 percent. If the loan to value ratio is 70 percent (equity is 30 percent), what is the value of a property that generates $125,000 in net operating income.
Real time value of money : The company where Sally works pays higher base salaries (currently worth an additional $11,000/year) to graduates with Masters Degrees compared to a Bachelor’s Degree. Over a 40 year career, what is the Masters Degree worth to Sally, assuming a 4% re..
Single parent and motivational training consultant : Michael Margolis is a single parent and motivational training consultant from Reno, Arizona. He is wondering about potential returns on investments given certain amounts of risk. Michael invested a total of $6000 in three stocks ($2000 in each) with ..

Reviews

Write a Review

 

Financial Management Questions & Answers

  Should may berry implement the design change

A design change being considered by Mayberry, Inc., will cost $6,000 and will result in an annual savings of $1,000 per year for the 6-year life of the project. A cost of $2,000 will be avoided at the end of the project as a result of the change. MAR..

  Genesisrsquo newly established operations management team

genesisrsquo newly established operations management team decided to seek outside assistance in developing a long-term

  Footnote for danerys year-end financial statements

Write the footnote for Danerys' year-end financial statements (assume 12/31/13 year-end) related to goodwill and other intangible assets - Determine the appropriate acquisition-date journal entry for the acquisition.

  Review the pharmacarecompcare scenario in assignment to

legal and ethical considerations in marketing product safety and intellectual propertyreview the pharmacarecompcare

  What is queuing theory

What is queuing theory? Describe the different types of costs involved in a queuing system. In what areas of management can queuing theory be applied successfully

  What are the proceeds of the issue for each company

Company XYZ enters into firm commitment underwriting agreement with Company ABC to issue 4200 of bonds with a 1,000 face value. Company ABC agrees to buy the bonds for $620 each and sells 84% of the issue in the market for $831 per bond. What are the..

  Interest with monthly compounding

Approximately how much should be accumulated by the beginning of retirement to provide a $2,500 monthly check that will last for 25 years, during which time the fund will earn 8% interest with monthly compounding?

  Pledges to increase its dividend

Metroplex Corporation will pay a $3.80 per share dividend next year. The company pledges to increase its dividend by 3.0 percent per year indefinitely. If you require an 11.9 percent return on your investment, you will pay $___________ for the compan..

  Calculate your total profit from triangular arbitrage

You observe the following three exchange rates at which you can buy or sell (borrow or lend). Calculate your total profit from triangular arbitrage, reporting your total profit in $ (by first calculating the profit in British pounds and then converti..

  Rate of return on stock using capital asset pricing model

Given the following data for a stock: beta = 1; risk-free rate = 4%; market premium = 6%. Calculate the expected rate of return on this stock using the capital asset pricing model.

  What is the amount of the free cash flow

How do I figure out this problem? Johnson's Nursery has net income of $42,500, depreciation expense of $1,800, interest expense of $900, taxes of $1,600, additions to net working capital of $2,300, and capital expenditures of $11,700. What is the amo..

  What is your total return for last year

You bought a share of 4.5 percent preferred stock for $96.18 last year. The market price for your stock is now $98.21. What is your total return for last year?

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