What level of pretax cost savings

Assignment Help Financial Management
Reference no: EM131554805

A proposed cost-saving device has an installed cost of $585,000. The device will be used in a five-year project but is classified as three-year MACRS (MACRS Table) property for tax purposes The required initial net working capital investment is $45,000, the marginal tax rate is 35 percent, and the project discount rate is 12 percent device has an estimated Year 5salvage value of $(expression error).

Required

What level of pretax cost savings do we require for this project to be profitable? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Reference no: EM131554805

Questions Cloud

What is annual ordering cost of cheese inventory : The company is using Economic Order Quantity model in placing the orders. What is the annual ordering cost of cheese inventory.
Develop a logical model of a proposed system : Why is it important to develop a logical model of a proposed system before generating a technical architecture? What potential problems would arise.
How does ovid convey his sympathy for the victims : How does Ovid convey his sympathy for the victims and his disdain for the rapists
Compare and contrast criminal justice organizations with ngo : Compare and contrast criminal justice organizations with nonprofit organizations. Summarize any theories or conclusions reached by the author.
What level of pretax cost savings : What level of pretax cost savings do we require for this project to be profitable?
What ethical issues did the banks and lenders face : "The Financial Crisis" in Gitman and Zutter. Discuss the root causes of the crisis and damages that it caused to society as a whole.
Discuss a current controversial topic : Does the source article discuss a current controversial topic? Does you analysis identify the argument (point of view)
What is the inherent factor in criminal justice organization : Please answer in complete paragraph form. Do not use .edu, .com, .org, and .net websites or I think or I believe. Use academic or government websites along.
What are the goals of treatment : What is the patient's medical problem? Is the problem acute? Chronic? Critical? Reversible? Emergent?Terminal?What are the goals of treatment?

Reviews

Write a Review

Financial Management Questions & Answers

  Earnings before interest and taxes-debt-assets ration

ABC Bike Company has $200,000 in assets, and had Earnings Before Interest and Taxes of $50,000 for the 12 month period ended September 30th. The company's marginal tax rate is 40% and it pays interest of 8% on any debt. If the company has a 40% Debt/..

  What is total asset turnover and the capital intensity

What is the total asset turnover and the capital intensity?

  Find probability that the stock of new castle is undervalued

Determine the required rate of return for New Castle's common stock. Determine the probability that the stock of New Castle is undervalued at its current market price of $25 per share.

  They will owe zero at the end of the mortgage

The Woods have $50,000 to use as a down-payment on a house, and they want to borrow $250,000 to buy a house for $300,000. The current annual mortgage interest rate is 3%. What will their monthly payment be for a 30 year loan that has equal monthly pa..

  Make coupon payments semiannually

Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German company issues a bond with a par value of €1,000, 15 years to maturity, and a coupon r..

  The bonds make semiannual payments and currently sell

Bourdon Software has 12 percent coupon bonds on the market with 16 years to maturity. The bonds make semiannual payments and currently sell for 108.8 percent of par. What is the current yield on the bonds? What is the YTM? What is the effective annua..

  What was its operating profit margin

In 2014 Electric Autos had sales of $180 million and assets at the start of the year of $310 million. If its return on start-of-year assets was 10%, what was its operating profit margin?

  Balance sheet are in order of accounting liquidity.

Assets presented on the balance sheet are in order of accounting liquidity. Accounting liquidity refers to:

  What is expected capital gains yield-dividend yield

The next dividend payment by Halestorm, Inc., will be $2.00 per share. The dividends are anticipated to maintain a growth rate of 6 percent forever. The stock currently sells for $40 per share. What is the dividend yield? What is the expected capital..

  The forward markets to hedge this potential risk

McKenna Corp prices its exports to UK in GBP. It is concerned that due to Brexit, GBP may fall substantially in value in the upcoming year. Explain the action it can take in the forward markets to hedge this potential risk.

  How much you should invest in the risky portfolio

The return on the risky portfolio is 16%. If you wish to earn a 20% return, how much you should invest in the risky portfolio?

  How much savings do you need to support

How much savings do you need to support yourself during retirement?- How much will you contribute to your retirement? Into what type of plan(s) will you contribute?

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