Customer Service Chat
Get quote & make Payment
Harriman, Other Engineering
HARRIMAN MANUFACTURING COMPANY
Harriman Manufacturing Company is evaluating the purchase of a new piece of equipment. The quoted price is $50,000, and it would cost Harriman another $ 10,000 for related capital costs such as transportation and equipment modification for special use. The total investment would fall into MACRS three year class with depreciation rates being applied to the full capitalized costs not excluding salvage at 33%, 45%, 15% and 7% in years 1-4, respectively. Harriman expects that the equipment would be sold in the fourth year, after three years, of use for a price of $20,000. During the three year period spare parts inventory would increase by $3,000 to maintain the equipment, but non-interest bearing accounts payable would increase by $1,000. Although the equipment is not expected to increase the firm''s revenue, it is expected to save it $20,000 in before tax labor operating costs. Harriman''s marginal tax rate is 40%.
a. Calculate the expected net cash outlay at the beginning of the first year.
b. Estimate the net operating cash flows in years 1, 2 and 3, and assume they occur at the end of each year.
c. What is the dollar value of the non-operating net cash terminal value (i.e., Salvage Value) in the fourth year?
d. If Harriman''s weighted average cost of capital is 10%, what are the investment''s Net Present Value, Internal Rate of Return and Simple Payback Period? Should the investment be made?
Posted Date: 6/7/2012 11:02:30 AM | Location : United States
Ask an Expert
Harriman, Assignment Help, Ask Question on Harriman, Get Answer, Expert's Help, Harriman Discussions
Write discussion on Harriman
Your posts are moderated
Write your message here..
Edc, Combination clipper
Finance, et C(K) denote a European vanilla Call option with strike price K....
et C(K) denote a European vanilla Call option with strike price K. Assume that all options are identical except for strike price, and strike prices satisfy (K1) What are the no-a
Oil supply failure - propeller, Oil supply failure - Propeller: To prev...
Oil supply failure - Propeller: To prevent an overspeed caused by an oil supply failure, one of two methods may be employed: • Hydraulic lock valve The pitch lock mecha
Propeller governing mode, Propeller governing mode: The speed lever is ...
Propeller governing mode: The speed lever is placed in the high position. The engine is operating at 97 percent. As the power lever is advanced ahead of the flight idle deten
Inspection checklist, Inspection Checklist: The following checklist is...
Inspection Checklist: The following checklist is a starting point and it may be added to if subsequent inspections and debriefs indicate that this would be beneficial. It sh
Combustion chamber injection system - aircraft engine , Combustion chamber ...
Combustion chamber injection system: Injecting a water or water/methanol mixture into the combustion chambers increases the mass flow through the turbine and the high volumetri
Optics, If the light source in figure 12.1 (see figure below) of the Warren...
If the light source in figure 12.1 (see figure below) of the Warren Smith text is replaced by a 100W light bulb, and the lens aperture is 20cm, what would the 1cm detector at point
#title., problem on dissociation constant
problem on dissociation constant
Define demat account?, Define Demat Account? What is the use of it? Dema...
Define Demat Account? What is the use of it? Demat indicates Dematerialization of reveal, in easy it is an consideration with which a individual can business in protection indus
Shrinkage cavities casting defects, Q. Discuss briefly the causes and rem...
Q. Discuss briefly the causes and remedies of Shrinkage cavities casting defects. OR Why shrinkage cavities are caus
Accounting Assignment Help
Economics Assignment Help
Finance Assignment Help
Statistics Assignment Help
Physics Assignment Help
Chemistry Assignment Help
Math Assignment Help
Biology Assignment Help
English Assignment Help
Management Assignment Help
Engineering Assignment Help
Programming Assignment Help
Computer Science Assignment Help
Why Us ?
~24x7 hrs Support
~Quality of Work
~Time on Delivery
~Privacy of Work
Human Resource Management
Literature Review Writing Help
Follow Us |
T & C
Copyright by ExpertsMind IT Educational Pvt. Ltd.