What is the initial outlay for the project

Assignment Help Finance Basics
Reference no: EM132070072

Atlantic Control Company purchased a machine 2 years ago at a cost of $70,000. The machine is being depreciated using simplified straight-line over its 7-year class life. The machine would have no salvage value at the end of year 7, but could be sold now for $40,000. A new replacement machine can be purchased for $80,000. The new machine would be depreciated over 5 years. Rapidly changing technology has necessitated this project. Delivery and installation charges will amount to $10,000 and net working capital investment of $5,000 will be required at installation. The new machine will not increase sales, but will reduce operating costs by $20,000 per year. The firm's tax rate is 21%. What is the initial outlay for the project?

Reference no: EM132070072

Questions Cloud

Evaulate the external financing needed : A dividend of $1996 was paid, and the company wishes to maintain a constant payout ratio. Next year's sales are projected to be $27317.
What is the firm additional funds needed : Based on the AFN equation, what is the firm's additional funds needed (AFN) for 2018?
Analyze how apple ratios : How to Compare and contrast Apple Corporation's ratios to industry and competitor standard ratios found from and analyze how Apple's ratios are different
How much will you have in the account on your birthday : How much will you have in the account on your 30th birthday if you don't withdraw any money before then?
What is the initial outlay for the project : The new machine will not increase sales, but will reduce operating costs by $20,000 per year. The firm's tax rate is 21%.
How much interest will you owe at the end of the first year : You receive a credit card application from Shady Banks Savings and Loan offering an introductory rate of 2.5 percent per year, compounded monthly.
Suppose you wish to sell the bond today : Four and a half years ago, you purchased at par, a 10 year 6% coupon bond that pays semi-annual interest. Today the market rate of interest
Interest rate and compound interest rate : Find the future value of $10,000 invested now after 5 years if the annual interest rate is 8%
What is the maximum dollar increase in sales that can : What is the maximum dollar increase in sales that can be sustained assuming no new equity is issued?

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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