What is the after-tax cash flow from the sale of equipment

Assignment Help Financial Management

Reference no: EM13923918

Quick Computing installed its previous generation of computer chip manufacturing equipment 3 years ago. Some of that older equipment will become unnecessary when the company goes into production of its new product. The obsolete equipment, which originally cost $41.5 million, has been depreciated straight-line over an assumed tax life of 5 years, but it can be sold now for $18.3 million. The firm’s tax rate is 30%. What is the after-tax cash flow from the sale of the equipment? (Enter your answer in millions rounded to 2 decimal places.)

After-tax cash flow $ million

Reference no: EM13923918

Questions Cloud

What rate of interest should the corporate bond pay : You are considering an investment in a U.S. corporate bond but you are not sure what rate of interest it should pay. Assume that the real risk-free rate of interest is 1.0%; inflation is expected to be 2.0%; the maturity risk premium is 1.5%; and, th..

Cell theory most directly violated by slime molds : Biologists have discovered living things that defy (do not agree with) "Cell Theory". Which aspect of the cell theory is most directly violated by slime molds?

What is the companys expected growth rate : WACC and Cost of Common Equity Kahn Inc. has a target capital structure of 65% common equity and 35% debt to fund its $10 billion in operating assets. Furthermore, Kahn Inc. has a WACC of 16%, a before-tax cost of debt of 8%, and a tax rate of 40%. W..

Estimate a bernoulli naive bayes classifer : Estimate a Bernoulli Naive Bayes classifer and apply the classifier to the test document - You are asked to perform group average hierarchical clustering on this dataset.

What is the after-tax cash flow from the sale of equipment : Quick Computing installed its previous generation of computer chip manufacturing equipment 3 years ago. Some of that older equipment will become unnecessary when the company goes into production of its new product. What is the after-tax cash flow fro..

Is smith an employee or an independent contractor : Tom Smith was hired to drive an airport shuttle for a rental car company back and forth from the airport to the rental car company's off-site parking lot. When Smith was hired, he signed a written contract that stated specifically that he was an i..

Using better inventory control systems : Better Mousetraps has developed a new trap. It can go into production for an initial investment in equipment of $6.0 million. The equipment will be depreciated straight line over 6 years to a value of zero, but in fact it can be sold after 6 years fo..

Optimal capital structure consists : Klose Outfitters Inc. believes that its optimal capital structure consists of 60% common equity and 40% debt, and its tax rate is 40%. Klose must raise additional capital to fund its upcoming expansion. The firm will have $3 million of retained earni..

Considering an investment in new operating equipment : Gramling Inc. is considering an investment in new operating equipment with a 15-year life. The new equipment will cost $300,000 and a one-time cost of $15,000 will be incurred to remove the old equipment and install the new equipment. Should Gramling..

User Account

All Pages