Calculate the after tax npw of endeavor for the company

Assignment Help Microeconomics

Reference no: EM132173488

Question: A manufacturing company spends $400,000 for the purchase and installation of a fully automated production facility for a subsystem of its main product. This operation is going to save the company a net $100,000 each year. The company is using the straight-line depreciation method and assumes a life of six years and a resale value of $10,000 for depreciation purposes. The company abandons this operation after five years and sells the facility for $100,000. The company has a combined tax rate of 40% and his cost of money is 8%. Calculate the after tax NPW of this endeavor for the company.

Reference no: EM132173488

Questions Cloud

What is the net present worth of the operation : An investor is purchasing a car repair facility with an initial cost of $90M. The facility will have before tax profit of $25M/Yr the first two years.

Explain how ingratiation helps a negotiator : When is it a good idea to let others draw their own conclusion? When is it dangerous to let others draw their own conclusions?

Reduction in the money supply on the economy : You may assume that the economy begins in long-run equilibrium. Be sure to show that impact on output and the price level on both the short and the long run?

Contradictions that effective project manager must face : Identify and give an example of three out of the six contradictions that an effective project manager must face.

Calculate the after tax npw of endeavor for the company : A manufacturing company spends $400,000 for the purchase and installation of a fully automated production facility for a subsystem of its main product.

What are the type i and type ii decision error cost : As an HR manager I'm trying to fill a vacant position for a job with a small talent pool.

Reviewing resource requirements throughout the project : After constructing a project network based on technical constraints and reviewing resource requirements throughout the project,

Calculate and draw the after tax cash flow : A company purchased equipment at a cost of $120,000. Net income is estimated at $30,000/Yr. The estimated life of the equipment is 10 years.

Traditional open market operations : Once the federal funds rate target reached almost zero at the end of 2008, traditional open market operations were no longer able to ease monetary policy

User Account

All Pages