What is the additional year cash flow

Assignment Help Finance Basics

Reference no: EM131953250

Question: The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $1,190,000, and it would cost another $16,500 to install it. The machine falls into the MACRS 3-year class (the applicable MACRS depreciation rates are 33.33%, 44.45%, 14.81%, and 7.41%), and it would be sold after 3 years for $595,000. The machine would require an increase in net working capital (inventory) of $15,500. The sprayer would not change revenues, but it is expected to save the firm $482,000 per year in before-tax operating costs, mainly labor. Campbell's marginal tax rate is 30%.

What is the additional Year-3 cash flow (i.e, the after-tax salvage and the return of working capital)? Round your answer to the nearest dollar.

Reference no: EM131953250

Questions Cloud

Measures in the talent management process : Based on a company that you studied or the company that you work for, what "leading" measures in the talent management process can be influenced

What percentage of an organization efforts : In your opinion, what percentage of an organization's efforts (time, money, manpower, etc.) should be used toward developing socially responsible policies.

Should snyder accept the outside vendors offer : The SNYDER CORPORATION produces gas grills. This year's expected production is 20,000 units. Currently SNYDER makes the side burners for its grills.

Thinking about taking three-year university degree : Linus is 18 years old now, and is thinking about taking a 5-year university degree.

What is the additional year cash flow : What is the additional Year-3 cash flow (i.e, the after-tax salvage and the return of working capital)? Round your answer to the nearest dollar.

Compare leadership styles to the models of change : Discuss how effective change initiatives can influence organizational performance

What is cameron inc net working capital : Cameron Balance sheet - Accounts payable and accruals 35, account receivable 60, accumulated depreciation (175), cash 32, common stock 120, fixed assets.

Describe the elements for effective decision making used : Your small services company has grown rapidly during its first two years and has outgrown the workspace that you have leased for three years.

Write a three page paper on the topic that you chose : Write a 3 page paper on the topic that you chose. You can copy and paste from the website just try to make some things in your own words.

User Account

All Pages