What is the book value of the equipment

Assignment Help Financial Management

Reference no: EM13765650

The Jones Company has just completed the third year of a five-year MACRS recovery period for a piece of equipment it originally purchased for $300,000.

a) What is the book value of the equipment?

b) If Jones sells the equipment today for $180,000 and its tax rate is 35%, what is the after-tax cash flow from selling it?

Reference no: EM13765650

Questions Cloud

About the huge cash reserves the companies accumulate : Shareholders of some companies occasionally complain about the huge cash reserves the companies accumulate. And, sometimes (Wal-Mart in 2007, Apple in 2013) firms indeed satisfy investor concerns and announce plans to distribute substantial portions ..

Consists of the price of the new equipment plus : Newcastle Coal Company is considering a project that requires an investment in new equipment of $3,800,000, with an additional $190,000 in shipping and installation costs. Newcastle estimates that its accounts receivable and inventories need to incre..

Target capital structure that consists of debt and equity : A company has a target capital structure that consists of 40 percent debt and 60 percent equity. The company's capital budget for next year is $10 million. The company expects a net income of $8 million. The company's cost of capital is 12 percent...

Developing materials for traditional photographic methods : Kodak used to primarily produce and distribute photographic paper and developing materials for traditional (i.e., non digital) photographic methods. A sizable portion of their business was home photography. Since they were one of the few suppliers of..

What is the book value of the equipment : The Jones Company has just completed the third year of a five-year MACRS recovery period for a piece of equipment it originally purchased for $300,000. What is the book value of the equipment?

What is the standard deviation of these returns : A stock had annual returns of 11 percent, 18 percent, 21 percent, 20 percent, and 34 percent over the past five years. What is the average of these returns? What is the standard deviation of these returns?

Market research spent to evaluate customer demand : Home Builder Supply, a retailer in the home improvement industry, currently operates seven retail outlets in Georgia and South Carolina. Management is contemplating building an eighth retail store across town from its most successful retail outlet. T..

Considering investing in one of two economies : You are a risk-averse investor who is considering investing in one of two economies. The expected return and volatility of all stocks in both economies is the same. In the first economy, all stocks move together in good times all prices rise together..

Suppose the risk-free interest rate : Suppose the risk-free interest rate is 4% and the market portfolio has an expected return of 10% and a standard deviation of 16%. Johnson & Johnson Corporation stock has a beta of 0.32. What is its expected return?

User Account

All Pages