Straight line depreciation, Financial Management

Alger Corp wants to buy some construction equipment for $50,000, which has a useful life of 4 years with no salvage value. Alger uses straight-line depreciation. Alger has a tax rate of 30%, and it uses a discount rate of 10%. The equipment will generate pretax income of $16,000 for the first year, but this figure will decline by 5% annually for the remaining three years. Should Alger buy this machine?

Posted Date: 2/27/2013 4:30:52 AM | Location : United States







Related Discussions:- Straight line depreciation, Assignment Help, Ask Question on Straight line depreciation, Get Answer, Expert's Help, Straight line depreciation Discussions

Write discussion on Straight line depreciation
Your posts are moderated
Related Questions
Write down what processes and data you would analyse when looking at the following scenarios and write down any improvements you could include to ensure that the problem would be l

Assume you are a professional financial analyst working for a wealthy investor.  Your client has $2.6 million to invest and wants to sink it into a single stock (diversification is

ABC Ltd. Produces electronic components with a selling price per of Rs.100. Fixed cost amount to Rs.2,00,000/- 5000 units are produced and sold each year. Annual profits amount to

Why does the riskiness of portfolios have to be looked at differently than the riskiness of individual assets? The riskiness of portfolios should be looked at differently as comp

conflicts between shareholders and government in agency relationship

Employee Benefit Plan - Compensation arrangement, usually in writing, used by employers in addition to wages or salary. Some plans like group term life insurance, medical insuranc

Inflation and Exchange Rates To understand the impact of inflation, several terms should be understood. For example, inflation from the investors' standpoint must be clearly de

Explain about the investment decision- financial management The investment decision relates to selection of assets in which funds would be invested by a firm. Assets which can

how to write a vegetation operating cycle

The TERRIER program cost estimate is in constant FY 2011 dollars, while the SPANIEL program cost estimate is in constant FY 2014 dollars. what is the most valid way of comparing th