About the annual pretax cost savings

Assignment Help Financial Management
Reference no: EM13913408

Warmack Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for \$450,000 is estimated to result in \$180,000 in annual pretax cost savings. The press falls in the MACRS five-year class, and it will have a salvage value at the end of the project of \$76,000. The press also requires an initial investment in spare parts inventory of \$18,000, along with an additional \$2,300 in inventory for each succeeding year of the project. The shop’s tax rate is 35 percent and its discount rate is 9 percent. MACRS schedule

Calculate the NPV of this project.

Questions Cloud

 Budgeting affects all of the following managerial functions : Budgeting affects all of the following managerial functions except Project evaluation-new seven-octave voice emulation implant : Project Evaluation [LO1] Aria Acoustics, Inc. (AAI), projects unit sales for a new seven-octave voice emulation implant as follows: Year Unit Sales 1 82,000 2 95,000 3 109,000 4 104,000 5 85,000 Production of the implants will require \$1,610,000 in n.. Can a company have a negative financing period : Can a company have a "negative" financing period? Why is a physical inventory needed under both the periodic and perpetual inventory systems? How has an understanding of consumer behavior helped group : 1. How has an understanding of consumer behavior helped Group on grow from 400 subscribers in Chicago in 2008 to 60 million subscribers in 40 countries today? About the annual pretax cost savings : Warmack Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for \$450,000 is estimated to result in \$180,000 in annual pretax cost savings Desires a weighted average cost of capital : Red Zone Inc. desires a weighted average cost of capital of 5 percent. The firm has an after-tax cost of debt of 4.8 percent and a cost of equity of 15.2 percent (assume that these costs do not change with the capital structure). What debt-equity rat.. Calculating npv, irr and pp advise which option should taken : By calculating NPV, IRR and PP (show all calculations on excel sheet) advise which option should be taken and say why compared to the other methods. Intangible assets and long term debt : Obtain an annual report from a publicly traded corporation that is interesting to you. Be sure the company has property and equipment, intangible assets, and long-term debt on its balance sheet. Using techniques you have learned in the previous weeks.. What should be the price per share : You are working on the valuation for an upcoming IPO. The company that wants to sell its stock expects the following future free cash flows (FCF, in millions of dollars): -7 in year 1, 7 in year 2, 15 in year 3, and cash flows are expected to grow st..

Write a Review

Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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!