Hat is the after-tax cash flow from the salvage value, Financial Accounting

Assignment Help:

48
Morgado Inc. has provided the following data to be used in evaluating a proposed investment project:
Initial investment $130,000
Annual cash receipts $78,000
Life of the project 6 years
Annual cash expenses $43,000
Salvage value $13,000

The company's tax rate is 30%. For tax purposes, the entire initial investment will be depreciated over 5 years without any reduction for salvage value. The company uses a discount rate of 19%.

1. When computing the net present value of the project, what are the annual after-tax cash receipts? A. $39,000 B. $13,650 C. $54,600 D. $23,400

2. When computing the net present value of the project, what are the annual after-tax cash expenses? A. $12,900 B. $30,100 C. $55,900 D. $30,000

3. By how much does the depreciation deduction reduce taxes each year in which the depreciation deduction is taken? A. $6,500 B. $15,167 C. $18,200 D. $7,800

4. When computing the net present value of the project, what is the after-tax cash flow from the salvage value in the final year? A. $9,100 B. $3,900 C. $13,000 D. $0

 


Related Discussions:- Hat is the after-tax cash flow from the salvage value

Interest-probable debts, Interest Interest may be claimed-up to the dat...

Interest Interest may be claimed-up to the date of the receiving order - if it is payable: By agreement; By statute; If the debt was created in writing and due at a

Hat is the after-tax cash flow from the salvage value, 48 Morgado Inc. has ...

48 Morgado Inc. has provided the following data to be used in evaluating a proposed investment project: Initial investment $130,000 Annual cash receipts $78,000 Life of th

Significant findings or issues, Significant Findings or Issues - Substanti...

Significant Findings or Issues - Substantive matters which are vital to procedures performed, conclusions reached or evidence obtained and include though aren't limited to: 1.

Redemption of debt, Q. Redemption of debt? Equity finance is permanent ...

Q. Redemption of debt? Equity finance is permanent capital that doesn't need to be redeemed while debt finance will need to be redeemed at some future date. Redeeming a huge am

Sales, what is recorded sales on account of 3,280

what is recorded sales on account of 3,280

Prepare the income statement, Dillings Ltd is a wholesaler and distributor ...

Dillings Ltd is a wholesaler and distributor of catering of office equipment. The following list of balances was extracted from its books at 31 March 2004: The following ad

Cost recovery deductions, On May 19, 2010, Kim placed in service a LIGHT VA...

On May 19, 2010, Kim placed in service a LIGHT VAN that cost $54,850. It is used 80% for business each year. What is the maximum cost recovery deduction available for the van in 20

Long as the yield to maturity, The Brownstone Corporation's bonds have 7 ye...

The Brownstone Corporation's bonds have 7 years remaining to maturity. Interest is paid yearly, the bonds have a $1,000 par value, and the coupon interest rate is 10%. a.

Effect of receiving order, Effect of receiving order The consequences o...

Effect of receiving order The consequences of the making of the receiving order are: The debtor retains ownership, but loses possession and control of his property; Th

Write Your Message!

Captcha
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