Calculate the initial investment

Assignment Help Corporate Finance
Reference no: EM1348429

Edwards Manufacturing Company is considering replacing one machine with another. The old machine was purchased 3 years ago for an installed cost of $10,000. The firm is depreciating the machine under MACRS, using 5-year recovery period. (See Table 3.2 on page 100 for the applicable depreciation percentage.) The new machine cost $24,000 and requires $2,000 in installation cost. The firm is subject to a 40% tax rate on both ordinary income and capital gains. In each of the following cases, calculate the initial investment for the replacement.

a. EMC sells the old machine for $11,000.
b. EMC sells the old machine for $7,000.
c. EMC sells the old machine for $2,900.
d. EMC sells the old machine for $1,500.

 

Reference no: EM1348429

Questions Cloud

Abuse of drug : Explore a web page that's dedicated to a number of drugs. Choose a drug that's unfamiliar and discuss anything you think is relevant regarding the drug (including chemical makeup and method of action).
What are the magnitudes of the components : A 23 gram bullet traveling 230m/s penetrates a 2kg block of wood and emerge clearly at 170m/s. If the block is stationary on a frictionless surface when hit, how fast does it move after bullet emerges.
How is emotion contributing to conflict : Read the below meeting and explain How is emotion contributing to this conflict - We are going to adjourn this meeting right now and I will see both of you individually later in the day. We will meet again as a staff tomorrow morning.
Explaining adaptive playout delay algorithm : Consider adaptive playout delay algorithm. Demonstrate through simple example which adjusting playout delay at beginning of each talk spurt results in compressing
Calculate the initial investment : Edwards Manufacturing corporation is planning replacing one machine with another. The old machine was purchased 3 years ago for an installed cost of $10,000.
Estimating cost allocation : Alaina's customer service department follows up on customer complaints by telephone inquiry. Costs allocated to the wholesale operation under activity-based costing system should amount to what?
Petsmarts overall goals and objectives : What are Petsmarts overall goals and objectives, and do earnings and growth projection bear this?
Drug profile-psychology and physiology of addiction : Identify specific drug substances covering the following categories: stimulants, depressants, narcotics, hallucinogens, and cannabis.
Calculate carmelita''s mass : The rectangular gate CD shown in the figure is 1.8 m wide and 2 long. Assuming the material of the gate to be homogeneous and neglecting friction at the hinge C, determine weight of the gate necessary to keep it shut until the water level rises to..

Reviews

Write a Review

Corporate Finance Questions & Answers

  Prepare the necessary closing entries in proper journal form

Preparation of necessary closing entries form the given adjusting transactions -  prepare the necessary closing entries in proper journal form

  Explain the operating profit margin

Select any public company, & present findings from your financial analysis in a report. The report must include the following;

  Calculate the total compounded return

Stock returns 20% in the 1st year, declines 8% in the 2nd year, and increases 10% in the third year.

  Hedging against stock prices

Assume you own hundred shares of Dell Inc. stock. Today it is trading at $15/share, but you're worried Michael Dell might retire again, causing the price to go down.

  Compute the average duration of board service

The term of office for Federal Reserve Board of Governors is fourteen years. Determine how long does a member actually serve and also compute the average duration of Board service for these two twenty-year periods:

  Determine investments expected return

Carter Corporation is estimating a security. One-year Treasury bills are currently paying 9.1%. Determine the investment's expected return and standard deviation for security.

  Purpose a monthly income and expense plan for terrels

Preparation of monthly income and expense plan and analysis of financial position - Purpose a monthly income and expense plan for the Terrels in 2003.

  Determine the net income be under this alternative

Determination of net income under the alternatives - Determine the net income be under this alternative?

  Calculate the approximate risk premium for common stocks

Suppose that the consensus required rate of return on common stocks is 14%. In addition, you read in Fortune that expected rate of inflation is 5% & estimated long-term real growth rate is 3%.

  Explain the financial statements

Explain the three financial statements: balance sheet, income statement, and the statement of cash flows and explain how they are used and what information is contained in them.

  Finding net income for the period

Middleton Clinic had total assets of 500,000 dollar & an equity balance of 350,000 dollar at the end of 2006. One year later, at the end of 2007, clinic had dollar 575,000 in assets and $380,000 in equity.

  Find the geometric average return

You have the following values of return for a risky portfolio for many recent years. Suppose that the stock pays no dividends.

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