What is aftertax cash flow from the sale of this asset

Assignment Help Financial Management
Reference no: EM131347324

Consider an asset that costs $246,400 and is depreciated straight-line to zero over its 8-year tax life. The asset is to be used in a 3-year project; at the end of the project, the asset can be sold for $30,800. Required : If the relevant tax rate is 34 percent, what is the aftertax cash flow from the sale of this asset?

$72,688.00

$76,322.40

$460,164.00

$69,053.60

$20,328.00

Reference no: EM131347324

Questions Cloud

How high oil prices could reduce real gdp : In 2003, there was much concern that rising oil prices would contribute to a global recession. Use aggregate demand and supply analysis to explain how high oil prices could reduce real GDP.
Calculate the value of the two accounts at end of one year : Joseph is a friend of yours. He has plenty of money but little financial sense. He received a gift of $12,000 for his recent graduation and is looking for a bank in which to deposit the funds. Calculate the value of the two accounts at the end of one..
Describe the types of resources ea appears to have : Does EA exhibit the critical success factors for the new business context? Explain. Describe the types of resources EA appears to have. Do you think any of these resources might be unique? Explain.
Explain why the curve has this shape : Now draw a long-run aggregate supply curve that intersects a short-run AS curve. What is the rel tionship between short-run AS and long-run AS?
What is aftertax cash flow from the sale of this asset : Consider an asset that costs $246,400 and is depreciated straight-line to zero over its 8-year tax life. The asset is to be used in a 3-year project; at the end of the project, the asset can be sold for $30,800. Required : If the relevant tax rate is..
Payback period-npv and profitability index : The firm requires its projects to recover the initial investment within 3 years.  Payback period, NPV, Profitability index, Internal rate of return, Should the firm invest in this project? Why or why not? You must give specific reasons based on all o..
Discuss the financial position of trap adventures inc : What is the largest percentage? What is the smallest percentage? Discuss the financial position of Trap Adventures, Inc using the following ratios: Current ratio and Return on equity.
Create an ungrouped frequency distribution table : You create and analyze frequency distributions of data provided as a Microsoft Excel file. Import the data into SPSS using the techniques described in Module 3, and then run frequency distribution tables, as instructed below, in SPSS. Note: It is ..
Firm has common stock with market price : A firm has common stock with a market price of $100 per share and an expected dividend of $5.61 per share at the end of the coming year. A new issue of stock is expected to be sold for $98, with $2 per share representing the underpricing necessary in..

Reviews

Write a Review

Financial Management Questions & Answers

  What is the current selling price-corporate bond

A $1,000 corporate bond with 20 years to maturity pays a coupon of 7% (semi-annual) and the market required rate of return is a0 6.6% b) 13%. What is the current selling price for a) and b)?

  Dividends are expected to grow at constant rate in future

Waldo Computer Chips Inc.’s current stock price is $36, and its last dividend was $2.40. In view of Waldo’s strong financial position, its required rate of return is only 12%. If dividends are expected to grow at a constant rate in the future, and if..

  Outstanding debts and calculate her debt safety ratio

Use worksheet 6.1 Natalie fry is evaluating her debt safety ratio how monthly take home pay is $3,320 each month she pays $380 for an auto loan $120 on a personal line of credit $60 on a department store charge card and $85 on her bank credit card co..

  Source of capital and weighted average cost of capital

Given the following information: Percent of capital structure: Debt 35% Preferred stock 20 Common equity 45 Additional information: Bond coupon rate 11 % Bond yield to maturity 9 % Dividend, expected common $ 5.00. Calculate the Hamilton Corp.'s weig..

  Units are expected to be sold

A company has $6.10 per unit in variable costs and $3.80 per unit in fixed costs at a volume of 50,000 units. If the company marks up total cost by 0.47, what price should be charged if 67,000 units are expected to be sold?

  Divided between capital gains yield and dividend yield

Suppose you know that a company’s stock currently sells for $62 per share and the required return on the stock is 12 percent. You also know that the total return on the stock is evenly divided between a capital gains yield and a dividend yield.

  Type of common stocks and one type of bond outstanding

Cooper has one type of common stocks and one type of bond outstanding. The total book value for the common stocks is $10million and the book value per share is $2million. The expected market premium is 12% and the current risk rate is 3%. Cooper equi..

  Summarize pros and cons of the six capital budgeting methods

Summarize the pros and cons of the six capital budgeting methods. In what types of situations would capital budgeting decisions be made solely on the basis of project's Net Present Value (NPV)?

  Extension of the firm current operations

Panelli's is analyzing a project with an initial cost of $110,000 and cash inflows of $65,000 in year 1 and $74,000 in year 2. This project is an extension of the firm's current operations and thus is equally as risky as the current firm. The firm us..

  What is the initial investment outlay for spectrometer

You must evaluate a proposed spectrometer for the R&D department. The base price is $240,000, and it would cost another $60,000 to modify the equipment for special use by the firm. What is the initial investment outlay for the spectrometer, that is, ..

  Calculate flexible budget by ten charter increments

Faulkner Charter Boats company runs boating trips along the Alabama River. Below are actual and budgeted costs. A. Calculate a flexible budget by 10 charter increments (100 -140 charters). Compare the flexible budget from data in part A.

  Nuclear research laboratory-high-tech equipment

You work for a nuclear research laboratory that is contemplating leasing a diagnostic scanner (leasing is a very common practice with expensive, high-tech equipment). The scanner costs $6,400,000. Because of radiation contamination, it will actually ..

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