What is the project terminal cash flow

Assignment Help Finance Basics
Reference no: EM13710129

What is the project's terminal cash flow? if PDF Corp needs to replace an old lathe with a new, more efficient model. The old lathe was purchased for $50,000 nine years ago and has a current book value of $5,000. (The old machine is being depreciated on a straight-line basis over a ten-year useful life.) The new lathe costs $100,000. It will cost the company $10,000 to get the new lathe to the factory and get it installed. The old machine will be sold as scrap metal for $2,000. The new machine is also being depreciated on a straight-line basis over ten years. Sales are expected to increase by $8,000 per year while operatingexpenses are expected to decrease by $12,000 per year. PDF's marginal tax rate is 40%. Additional working capital of $3,000 is required to maintain the new macine and higher sales level. The new lathe is expected to be sold for $5,000 at the end of the project's ten year life

Reference no: EM13710129

Questions Cloud

Describe safety in the oil and gas industry : Managing Safety Operations in the Oil and Gas Industry. Explore Current Management Practices and Determine if they are Effective.
Use the laws of supply and demand in your everyday : 1. You use the laws of supply and demand in your everyday decision making. If a product is in short supply is typically priced higher because demand is greater. Can you relate this a purchase decision you've made in the past?
The international court of justice : The International Court of Justice (The World Court), located at the Peace Palace in The Hague (Netherlands), was established in conjunction with the United Nations in 1946. The World Court has two primary functions: (1) settle in accordance wi..
Explore management tools- moving average forecasting models : Moving average forecasting models are important tools that help managers make educated decisions. Moving averages are mainly used to forecast short historical range data.
What is the project terminal cash flow : What is the project's terminal cash flow? if PDF Corp needs to replace an old lathe with a new, more efficient model. The old lathe was purchased for $50,000 nine years ago and has a current book value of $5,000. (The old machine is being deprec..
What might cause a person to set his or her values aside : Write a 2- to 3-page assessment of the authors' claims, and your assessment of what might be done in a place of business to prevent the 'moral amnesia' phenomenon from taking a foothold in a place of business.
National health corporation (nhc) has a cumulative : 18.   National Health Corporation (NHC) has a cumulative preferred stock issue outstanding, which has a stated annual dividend of $8 per share. The company has been losing money and has not paid preferred dividends for the last five years. Ther..
Explain the processing of passport forms : Formulate a Linear Programming model that will determine how many employees should be hired each week and how the employees should be assigned to different tasks over the next 5 weeks.
Determine whether interest parity rate exists : Assume zero transaction costs. As of now, the Japanese one-year interest rate is 3%, and the US one-year interest rate is 9%. The spot rate of the Japanese yen is $.0090 and the one-year forward rate of Japanese yen is $.0097.

Reviews

Write a Review

Finance Basics Questions & Answers

  Objective type question based on bonds and their valuation

Objective type question based on bonds and their valuation and what would be the value of the Allied Signal Corporation bonds at an 8 % requirement rate of return if the interest were paid and compounded semiannually

  Enterprise free cash flow

Enterprise Free Cash Flow should include: Capital Expenditures, Financing Costs, Working Capital Requirements, Taxes. Which of these four?

  What was the bank franc rate of return

The borrower repaid euros at loan maturity and when the loan was repaid the exchange rate was 1.98 francs per dollar. What was the bank's franc rate of return? -2.82% 9.94% 5.71% 7.75% 11.04%

  Lockbox and concentration banking

Anthony Marino, CFO of Thousand Years Corporation, is evaluating two alternatives of float management: lockbox and concentration banking. The average number of daily payments to lockboxes is 250 with the average size of each payment at $7,500.

  Explain difference between accrual and cash-based accounting

Explain the difference between accrual- and cash-based accounting. How can accrual accounting create opportunities for unethical accounting practices?

  Method in quoting foreign currencies

Explain the direct and indirect method in quoting foreign currencies. Provide some examples.

  Select best option in insurance policy

You are the beneficiary of a life insurance policy. The insurance firm informs you that you have two options for receiving the insurance proceeds.

  You sell a 6 percent 10000 bond for 9180 plus 156 in

you sell a 6 percent 10000 bond for 9180 plus 156 in accrued interest for a total of 9336. soon thereafter the company

  Compute the weighted average cost of capital

Later in the year, the firm turns down an opportunity to buy a new machine that would yield a 15% return but would cost 17% t finance through common equity. Assume debt and common equity each represent 50% of the firm's capital structure.

  Does the financial manager have a greater responsibility

Does the financial manager have a greater responsibility or a lesser responsibility for maintaining ethical corporate governance? Why or why not? What is or will be your approach to ethical corporate governance now or in the future?

  What is the net income annually for the plant

Due to efficiency, this was reduced 10%. The depreciation of the plant is 50,000 per year. Assuming a corporate tax rate of 40%, what is the net income annually for the plant?

  Choose one of the public policy issues discussed in lesson

choose one of the public policy issues discussed in lesson 7 poverty corporate welfare or outsourcing do some

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