What annual cash flows the new equipment will generate

Assignment Help Financial Management
Reference no: EM132022297

The XYZ Company is considering buying a modern equipment for $220,000. The new equipment will be depreciated (as per the following schedule. Year 1: 15%, Year 2: 30%, Year 3: 25%, Year 4: 20%, Year 5: 10%) to a salvage value of $0 in five years. The new equipment will increase annual revenues by $142,000 and annual-operating expenses by $81,000. The net working capital will increase by $40,000 at a time period 0 but will be available at the end of the project. The company's marginal tax rate is 34%. What annual cash flows the new equipment will generate? What is the payback, discounted payback, IRR and NPV if required rate is 13%?

Reference no: EM132022297

Questions Cloud

Effective interest rate-loan were based on simple interest : What would be the effective interest rate if the loan were based on simple interest? What would be the EAR if the loan were a discount interest loan?
How does the code define a capital asset : Capital Assets. How does the code define a capital asset? The response must be typed, single spaced.
Design into a computer program : Explain the benefits of incorporating a modular design into a computer program. Would it be more efficient to write one large program? Why or why not?
What are the tax effects of giving and receiving boot : Boot (not the kind you wear!) What is boot? What are the tax effects of giving and receiving boot in a like-kind exchange?
What annual cash flows the new equipment will generate : What annual cash flows the new equipment will generate? What is the payback, discounted payback, IRR and NPV if required rate is 13%?
Size of graphic images to the greatest extent possible : Why is it a general rule of web page design to minimize the size of graphic images to the greatest extent possible?
What is the npv of agreeing to write the book : What is the NPV of agreeing to write the book (ignoring any royalty payments)?
What are some examples of properties for treatment : What are some examples of properties that qualify for § 1031 treatment? Please explain the qualification. The response must be typed.
Levered firm optimal capital structure : A taxpaying, levered firm's optimal capital structure:

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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