Beta company is considering buying widget fogger

Assignment Help Financial Management
Reference no: EM13918050

Beta company is considering buying a widget fogger, It will cost $25000 to purchase and $5000 to install. It will be depreciated SACRS ( 20 % 40 % 15 % 15 % 10 % ) and will last four years before being sold as scrap for $3000. Beta s tax rate is 20 %. the purchase of the fogger will get beta an 8% investment tax credit . a) write the depreciation table and calculate the cash flow from the sale at time 4 . b ) The fogger will enable beta to sell more widgets for higher price and so raise revenue by $ 15000 per year , while raising expenses by $5000 per year . Calculate the cash flow for the project.

Reference no: EM13918050

Questions Cloud

What is restorative justice : What is Restorative Justice? Why is the Restorative Justice model so compatible with the treatment and rehabilitation needs of juvenile offenders
Type of anova should you use to analyze these data : 1. Which type of ANOVA should you use to analyze these data, and why should you choose this type of ANOVA? 2. Analyze your data, being sure to interpret your results and explain your reasons for declaring them significant or not significant.
Three different organizations that provide selected product : Select a product or service. Then select three different organizations that provide your selected product or service and compare the prices associated with your selected product or service. What is the difference between the prices among the diffe..
Define and describe the communication process : Research, define and describe the communication process, the different types of communication as well as why it is important in an organization. Two pages
Beta company is considering buying widget fogger : Beta company is considering buying a widget fogger, It will cost $25000 to purchase and $5000 to install. It will be depreciated SACRS ( 20 % 40 % 15 % 15 % 10 % ) and will last four years before being sold as scrap for $3000. Beta s tax rate is 20 %..
Find the mean-variance and standard deviation : A daily number lottery chooses three balls numbered 0 to 9. The probability of winning the lottery is 1/1000. Let x be the number of times you play the lottery before winning the first time. (a) Find the mean, variance, and standard deviation. Int..
Costs flow directly to the current income statement : Costs that flow directly to the current income statement are called: A. Period costs. B. Balance sheet costs. C. Product costs. D. Capitalized costs. E. General costs.
Relationship between channels of distribution and logistics : What is a distribution channel? What is the relationship between channels of distribution and logistics? How does geographical location affect your selection of distribution channels?
Discuss the type of information that is available : Discuss the type of information that is available on the website for the American Medical Association (www.ama-assn.org). Click on the Resources tab and then click on Legal Issues

Reviews

Write a Review

Financial Management Questions & Answers

  Financial performance planning monitoring

Explain if the source of cash sustainable, and list any outstanding variances - Write down what processes and data you would analyse when looking at the following scenarios and write down any improvements.

  ART has come out with a new and improved product

ART has come out with a new and improved product. As a result, the firm projects an ROE of 30%, and it will maintain a plowback ratio of 0.20. Its earnings this year will be $3.0 per share. Investors expect a 16% rate of return on the stock. What pri..

  Assume semi-annual payments-what is the yield to maturity

ABC Inc., has $1,000 face value bonds outstanding. These bonds mature in 3 years, and have a 6.5 percent coupon. The current price is quoted at 98.59 percent of par value. Assume semi-annual payments. What is the yield to maturity?

  What is expected return on stock-considering for purchase

Ronnie estimates that there are three possible return outcomes for a stock he is considering for purchase. He thinks there is a 25% chance the economy will boom and his stock will return 25%, a 50% chance the economy will continue at its current pace..

  Explain the appropriate treatment in decision making

Define, give an example, and explain the appropriate treatment in decision making

  Assume the company operates at full capacity

Pumpkin Mfg., Inc., is currently operating at only 92 percent of fixed asset capacity. Current sales are $780,000. Fixed assets are $470,000 and sales are projected to grow to $880,000. How much in new fixed assets is required to support this growth ..

  Total of all interest payments and sinking fund deposits

Phil borrows 1,000 for 5 years at a nominal annual rate of 6% convertible monthly. At the end of each month, he pays the interest on the loan and deposits the level amount necessary to repay the principal to a sinking fund earning a nominal annual ra..

  Bonds currently sell-yield to maturity

Crossfade Co. issued 16-year bonds two years ago at a coupon rate of 8.5 percent. The bonds make semiannual payments.

  Computer-based order entry system-what is irr for project

Your firm is contemplating the purchase of a new $605,000 computer-based order entry system. The system will be depreciated straight-line to zero over its five-year life. If the tax rate is 34 percent, what is the IRR for this project?

  What is the effect on gross profit and net operating income

The P Company applies overhead costs to jobs using machine hours as the allocation base. At the beginning of the year, 2014, the company estimated manufacturing overhead costs to be $1,400,000 and estimated total machine hours (the expected volume) t..

  Implication of efficiency market theory for financial policy

Explain the three different forms of the efficient markets hypothesis and discuss some of the implications of efficiency market theory for corporate financial policy.

  What market structure best describes the pizza market

Consider the pizza market in a small college town with the following assumptions: The market is in long-run equilibrium. Each pizza shop sells 100 pizzas per week. (For ease of exposition, suppose that each shop sells only pizza and only one size.) W..

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