Pdf corp needs to replace an old lathe with a new more

Assignment Help Accounting Basics
Reference no: EM13576411

PDF Corp. needs to replace an old lathe with a new, more efficient model. The old lathe was purchased for $50,000 nine years ago and has a current book value of $5,000. The new lathe costs $100,000. It will cost the company $10,000 to get the new lathe to the factory and get it installed. The old machine will be sold as scrap metal for $2,000. The new machine is also being depreciated on a straight-line basis over ten years. Sales are expected to increase by $8,000 per year while operating expenses are expected to decrease by $12,000 per year. PDF's marginal tax rate is 40%. Additional working capital of $3,000 is required to maintain the new machine and higher sales level. The new lathe is expected to be sold for $5,000 at the end of the project's ten-year life. What is the incremental free cash flow during years 2 through 10 of the project?

Reference no: EM13576411

Questions Cloud

Kelly corporation is considering an investment proposal : kelly corporation is considering an investment proposal that requires an initial investment of 150000 in equipment.
They are mutually exclusive and project risk has been : project x is very risky and has an npv of 3 million. project y is very safe and has an npv of 2.5 million. they are
What minimum sample size of randomly selected pregnancies : what minimum sample size of randomly selected pregnancies should you select?your criteria changed you randomly sample
Using the alphabetical list of account balances presented : using the alphabetical list of account balances presented below all of which are normal prepare a trial balance for
Pdf corp needs to replace an old lathe with a new more : pdf corp. needs to replace an old lathe with a new more efficient model. the old lathe was purchased for 50000 nine
What are the ratios needed to determine underreporting : what are the ratios needed to determine underreporting accounts payable? and why a company would under report account
Suppose the expected inflation rate rises to 10 but the : a. suppose the real interest rate is 3 per year and the expected inflation rate is 8. what is the nominal interest
Prepare journal entries without explanations for the : 1.prepare journal entries without explanations for the following transactions. write no entry if none is needed.a.
Suppose that the probability is 13 that she will choose the : question each time that a shopper purchases a tube of toothpaste she chooses either brand a or brand b. suppose that

Reviews

Write a Review

Accounting Basics Questions & Answers

  How should needsspace account for the two obligations noted

needs space has entered into a lease agreementwith wehaveit to rent space for its corporate offices. the lease

  Why is capital budgeting significant what is the irr method

why is capital budgeting significant? what is the irr method? how is it

  Assume two firms want to borrow money from the bank for

assume two firms want to borrow money from the bank for period of one year. firm a has excellent credit whereas firm bs

  Journal entry to record the investment

Barr Company acquires 60, 10%, 5 year, $1,000 Community bonds on January 1, 2010 for $61,250. This includes a brokerage commission of $1,250. The journal entry to record this investment includes a debit to

  The planning budget for march was based on producing and

preble company manufactures one product. its variable manufacturing overhead is applied to production based on direct

  Sanchez company has just completed a bond issue which

sanchez company has just completed a bond issue which resulted in 150000 of 5 year 8 bonds. interest is paid annually.

  Describe some of the information a good ais

Describe some of the information a good AIS could have provided for this firm and that, if provided in a timely manner, could have helped avoid some of its problems.

  Determine the book value of the building

During the first week in January of the current calendar year, major structural repairs are completed on the building at a $75,585 cost. The repairs extend its useful life for 7 years beyond the 20 years originally estimated. Determine the book va..

  What is the company’s days’ sales in receivables

A company has net income of $180,000, a profit margin of 7.5 percent, and an accounts receivable balance of $119,370. Assuming 80 percent of sales are on credit, what is the company’s days’ sales in receivables?

  Prepare schedules for expected collections

Prepare schedules for expected collections from customers and expected payments for direct materials purchases - prepare a cash budget for January and February in columnar form.

  What will the firm pe ratio be

Books and More currently has 75,000 shares of stock outstanding, net income of $46,000, and a PE ratio of 18.7. What will the firm's PE ratio be if the firm repurchases 15,000 shares?

  Equivalent units produced of direct material

Assume this company uses the FIFO method of process costing and direct material is added uniformly throughout the process. What are the equivalent units produced of direct material?

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