Galveston shipyards is considering the replacement of an

Assignment Help Finance Basics
Reference no: EM13570319

Galveston shipyards is considering the replacement of an eight year old riveting machine with a new one that will increase earnings before depreciation and taxes from $27,000 to $54,000 per year. The new machine will cost $82,500, and it will have an estimated life of eight years and no salvage value. The new machine will be depreciated over its 5 years MACRS recovery period ( year1 20%, 2 32%, 3 19%, 4 12%, 5 11%, 6 6%) THe firms marginal tax rate is 40%, and the firms required rate of return is 12%. The old machine has been fully depreciated and has no salvage value. Should the old riveting machine be replaced by the new one? Show all work for full rating.

Reference no: EM13570319

Questions Cloud

Astaire company uses the gross profit method to estimate : astaire company uses the gross profit method to estimate inventory for monthly reporting purposes. presented below is
Genetech has 4000000 in assets have decided to finance 30 : genetech has 4000000 in assets have decided to finance 30 with long-term financing 9 rate and 70 with short-term
Two divisions of a cmi are involved in a dispute division a : two divisions of a cmi are involved in a dispute. division a purchases part 101 and division b purchases part 201 from
Compute the present value of a perpetuity that pays 12961 : compute the present value of a perpetuity that pays 12961 annually given a required rate of return of 10 percent per
Galveston shipyards is considering the replacement of an : galveston shipyards is considering the replacement of an eight year old riveting machine with a new one that will
Record the journal entry that would be necessary for each : please identify which journal the following belong to. here are your choices cash payments journal cash receipts
How much can you spend on a car if the interest rate is : assume that you have saved up 5000 for a down payment on a car. assuming that you can afford a payment of 325 per
Separate the rate of return on assets into the return on : rate of return comparison of different companiesthe following data show five items from the financial statements of
Can you really trust your senses and the interpretation of : sensory perceptionscan you really trust your senses and the interpretation of sensory data to give you an accurate view

Reviews

Write a Review

Finance Basics Questions & Answers

  Impact on equation of accounting or journal entries

Record these transactions and any other required adjusting entries by showing their impact on the fundamental equation of accounting or journal entries.

  Is there a relation between level of inventories and sales

is there a relation between level of inventories and sales? are inventories a function of sales? if there is a

  What has happened to that firmstock price over the year

What has happened to that firm's stock price over the year?

  Should the treasurer proceed with his proposal

Compute the amount of the aftertax income from the additional preferred stock if it is purchased.

  Summer tyme inc is considering the new 3-year expansion

summer tyme inc. is considering a new 3-year expansion project that requires an initial fixed asset investment of 5.8

  Calculate present value if the discount rate is 10 percent

It can instead buy a truck at a cost of $93,000, with annual maintenance expenses of $23,000. The truck will be sold at the end of 4 years for $33,000. Calculate present value if the discount rate is 10%. Calulate to 4 decimals. PV of a Buy = PV o..

  Discussion typical reasoning

Discussion Typical Reasoning

  Calculate the percentage of amount due for each month

If the firm had $1,584,000 in credit sales over the four-month period, compute the average collection period. Avg. daily sales should be based on a 120-day period.

  Checkable deposits by issuing loans

Why is the US$ acceptable in the US and in a number of other countries? In what circumstances would the US$ no longer be acceptable? Explain how banks create checkable deposits by issuing loans.

  What is the dollar sales volume the firm must achieve

What would be the firm's profit or loss at the following units of production sold: 12,000 units? 15,000 units? 20,000 units?

  Assume emerson electrics managers expect an earnings

you have finally saved 10000 and are ready to make your first investment. you have the three following alternatives for

  How many new shares must the mitchell company sell

How many new shares must the Mitchell Company sell in order to net $50 million?

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