Calculate the operating cash inflows associated

Assignment Help Finance Basics
Reference no: EM131108585

Strong Tool Company has been considering purchasing a new lathe to replace a fully depreciated lathe that will last 5 more years. The new lathe is expected to have a 5-year life and depreciation charges of $2,000 in year 1; $3,200 in year 2; $1,900 in year 3; $1,200 in both year 4 and year 5; and $500 in year 6. The firm estimates the revenues and expenses for the new and the old lathes to be as shown in the table. The firm is subject to a 40% tax rate.
1427_s.jpg
a. Calculate the operating cash inflows associated with each lathe. 

b. Calculate the incremental (relevant) operating cash inflows resulting from the proposed lathe replacement.

c. Depict on a time line the incremental operating cash inflows calculated in partb.

Reference no: EM131108585

Questions Cloud

What is the definition of valuation allowance : What is the definition of valuation allowance?
What is the probability that you will be a magic elf : If you randomly choose your character and tool, what is the probability that you'll be a magic elf?
The strength of the dollar impact imports and exports : What types of products does the US export and what types of products do we import? Why do you think those are the products we export or import? How does the strength of the dollar impact imports and exports?
What is the probability that you will end up : If you randomly pick the plant and the pot, what is the probability that you'll end up with a tulip in a plastic pot?
Calculate the operating cash inflows associated : Calculate the operating cash inflows associated with each lathe. Calculate the incremental (relevant) operating cash inflows resulting from the proposed lathe replacement. Depict on a time line the incremental operating cash inflows calculated in par..
Young man corporation has temporary differences at december : Indicate how these balances would be presented in Youngman's December 31, 2010, balance sheet.
Create an entity-relationship diagram : 1. Create an entity-relationship diagram (ERD) based on the following information. A building contains one or more labs and a lab is contained in one building. A lab contains one or more computers and a computer is contained in one lab.
Discuss both positive and negative aspects of its influence : Writing Prompt: What was the Monroe Doctrine, and what influence did it have? Discuss both positive and negative aspects of its influence
Theory of liquidity preference and market for real money : Use the theory of liquidity preference and the market for real money balances to illustrate graphically the impact of a decrease in income on the equilibrium interest rate. Be sure to label: i. the axes; ii. the curves; iii. the initial equilibrium v..

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the maximum price per share schultz should pay

The cost of capital for Schultz and Arras is 9 percent and 7 percent, respectively. Arras currently has 3 million shares of stock outstanding and $25 million in debt outstanding.

  What is the reward-to-risk ratio

The U.S. Treasury bill is yielding 5.1 percent while a stock with a beta of 1.08 is yielding 12.3 percent. What is the reward-to-risk ratio?

  Riskiest base on standard deviation

Based on the answer from question three, which asset appears riskiest base on standard deviation - Explain the various that you might take and their implications

  What is the taxable income

Sybil, age 40, is single and supports her dependent parents who live with her, as well as her grandfather who is in a nursing home. She has AGI of $80,000 and itemized deductions of $8,000. What is the taxable income?

  What has occurred with company dividend payout

What has occurred with company’s dividend payout, dividend yield, and dividend per share over the past three years? Do you have any explanations for what has occurred? How do Netflix dividends payout, dividend yield, and dividend per share compared t..

  Earnings in the firm to finance growth

Chastain's Gardening Supplies, Inc. is a young start-up company. It plans to pay no dividends over the next five years because it needs to reinvest all earnings in the firm to finance growth.

  Most ethical and socially responsible

Your company is losing money and sadly, they have to downsize. You are the HR manager and you have to give all the departments a guide for selecting people to let go. Please tell me the most ethical and socially responsible way to make the choice ..

  Identify three prominent figures in the harlem renaissance

Identify three prominent figures in the Harlem Renaissance, note the contributions of each, and note their collective impact on American society.

  How to measure banking sector competition

Asymmetric information, moral hazard and adverse selection. Reasons why banks exist and How to measure banking sector competition and the link between bank competition and fragility / stability

  What was the firm free cash flow

In order to sustain its operations and thus generate future sales and cash flow, the firm was required to spend $15250 to buy new fixed assets and to invest $6850 in net working capital. What was the firm's free cash flow?

  What is the purpose of the federal reserve

What is the purpose of the Federal Reserve? Explore and discuss its economic goals. How does the Fed pursue its economic goals? What is behavioral finance?

  Computing firm-s value and its ebitda multiple

Compute Soundbytes’ enterprise value and its EBITDA multiple. Compute Hagar Enterprise’s EBITDA.

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