Calculate initial outlay associated with selling old machine

Assignment Help Financial Management
Reference no: EM131084334

The Olson Company plans to replace an old machine with a new one costing $85,000 The old machine originally cost $55,000 and has 6 years of its expected 11-year life remaining It has been depreciated straight line assuming zero salvage value and has a current maker value of $24,000. Olson's effective tax rate is 36% Calculate the initial outlay associated with selling the old machine and acquiring the new one.

Reference no: EM131084334

Questions Cloud

Does the convertible issues lower coupon rate : Suppose a company simultaneously issues $50 million of convertible bonds with a coupon rate of 10% and $50 million of straight bonds with a coupon rate of 14%. Both bonds have the same maturity. Does the convertible issue's lower coupon rate suggest ..
Why many religious people feel compelled to remake society : Analyze the relationship between religion and reform in the decades from 1800 to 1860. Why did many religious people feel compelled to remake society? How successful were they? Do you see any parallels with social movements today?
Calculate the projects initial outlay : Flextech Inc is considering a project that will require new equipment costing $150,000 It will replace old equipment with a book value of $35,000 that can be sold on the secondhand market for $75,000 The company marginal tax rate is 35% Calculate the..
Traditional-face-to-face universities : These are the causes. Brainstorm a list or short paragraph of reasons why students attend traditional/face-to-face universities. Note: you will be writing your essay on the reasons why students pursue online educations, so this is a parallel topic..
Calculate initial outlay associated with selling old machine : The Olson Company plans to replace an old machine with a new one costing $85,000 The old machine originally cost $55,000 and has 6 years of its expected 11-year life remaining. Calculate the initial outlay associated with selling the old machine and ..
What is the equivalent uniform annual cost per machine : what is the equivalent uniform annual cost per machine (years1 through 5) at an interest rate of 12% per year?
Gaussian random variable with the same expected value : Recreate the plots of Figure 6.3. On the same plots, superimpose the PDF of Yn , a Gaussian random variable with the same expected value and variance. If Xn denotes the binomial (n, p) random variable, explain why for most integers k,
Develop five year cash flow estimate for the proposal : Auburn Concrete Inc. is considering the purchase of a new concrete mixer to replace an inefficient older model. If purchased, the new machine will cost $90,000 and is exacted to generate savings of 540.000 per year for five years at the end of which ..
Explain what will happen to unemployment : Explain what will happen to unemployment using both classical and Keynesian reasoning.

Reviews

Write a Review

Financial Management Questions & Answers

  Franchising is a win-win combination

Franchising is a win-win combination; both franchisees and franchisors are guaranteed success. The main reasons small businesses fail are poor management skills on the part of owners, inadequate capital, and poor planning.

  What will be the present value of the tax shield

A triple A rated company borrows $100 millions interest only loan for a 10 year period at fixed rate of 5.5 percent. Assuming the company is in the 35 percent tax bracket. What will be the present value of the tax shield over the ten year period assu..

  Dividends per share are expected to grow indefinitely

XYZ company dividends per share are expected to grow indefinitely by 3% a year. Next year's dividend is $4.50 and the required rate of return (i.e. equity holder's opportunity cost of capital) is 8%. Assuming this is the best information available re..

  Stated annual rate-corresponding effective annual rate

A bond pays 1.5% at the end of every quarter over 5 years. What would be the corresponding ‘stated annual rate’ and the corresponding ‘effective annual rate’?

  Describe a hedging strategy using futures contracts

Hedging Strategies For the following scenarios, describe a hedging strategy using futures contracts that might be considered.

  What is the duration of a four-year treasury bond

What is the duration of a four-year Treasury bond with a 11 percent semiannual coupon selling at par? What is the duration of a three-year Treasury bond with a 11 percent semiannual coupon selling at par?  What is the duration of a two-year Treasury ..

  Bond if the relevant market interest rate

You currently own a bond you purchased at par when it was issued ten years ago. The bond has a 7 percent annual coupon and matures 5 years from now. Which one of the following statements applies to this bond if the relevant market interest rate is no..

  What do you think the ex-dividend price will be

Miller, Inc., has declared a $6.30 per share dividend. Suppose capital gains are not taxed, but dividends are taxed at 10 percent. New IRS regulations require that taxes be withheld at the time the dividend is paid. Miller sells for $114 per share, a..

  What is the expected return of portfolio

You have invested 30 percent of your portfolio in Jacob Inc, and 40 percent in Bella co and 30 percent in Edward Resources. What is the expected return of your portfolio if Jacob, Nella and Edward have expected returns of 0.09, 0.14, and 0.11 respect..

  Constant dividend payout theory of dividends

Explain this statement: “Even though both the Constant Dividend Payout theory of dividends and the residual theory of dividends result in erratic dividends over time, both theories arrive at the same conclusion differently.” (State the conclusion fir..

  What is the inventory period

Garnishes, Inc. has sales for the year of $46,300 and cost of goods sold of $21,700. The firm carries an average inventory of $4,800 and has an average accounts payable balance of $4,400. What is the inventory period?

  Advantages of the corporate organizational structure

What inherent characteristic of corporations creates the need for a system of checks on manager behavior and what are some examples of agency problems - what are the advantages and disadvantages of the corporate organizational structure?

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