What level of pretax cost savings do we require

Assignment Help Finance Basics
Reference no: EM13272546

A proposed cost-saving device has an installed cost of $640,000. The device will be used in a five-year project but is classified as three-year MACRS property for tax purposes. The required initial net working capital investment is $55,000, the marginal tax rate is 35 percent, and the project discount rate is 12 percent. The device has an estimated Year 5 salvage value of $60,000. What level of pretax cost savings do we require for this project to be profitable?

Reference no: EM13272546

Questions Cloud

Determine the acceleration of the sled : Jone pulls her brother on a sled over a horizontal surface with force of 80N. The force is at an angle of 25 degree, determine the acceleration of the sled
What is the yield on 2-year treasury securities : The real risk-free rate is 3.25%. Inflation is expected to be 1.75% this year and 5% during the next 2 years. Assume that the maturity risk premium is zero.
How much work is done by the electric field due to the sheet : (a) How much work is done by the electric field due to the sheet if a particle of charge q = +1.60 × 10-19 C is moved from the sheet to a point P at distance d = 3.38 cm from the sheet b) If the electric potential V is defined to be zero on the she..
What steps do vikki and tim need to take to prepare : What steps do Vikki and Tim need to take to prepare for retirement?
What level of pretax cost savings do we require : The device has an estimated Year 5 salvage value of $60,000. What level of pretax cost savings do we require for this project to be profitable?
What is initial speed of electron if it stop just at surface : Two charged, parallel, flat conducting surfaces are spaced d = 2.10 cm apart and produce a potential difference ΔV = 500 V between them. An electron is projected from one surface directly toward the second.
Building online communities and social networks : Identify and describe three of the most significant best practices for building online communities and social networks
Define if the response is periodic with period 4 seconds : 1. If x(t) is periodic with period 2.1 seconds and y(t) is periodic with period 2.4 seconds, is x(t)+y(t) periodic Why or why not 2. If x[n] is periodic with period 15 seconds and y[n] is periodic with period 10 seconds, is x[n]+y[n] periodic
Nomination process will produce a qualified nominee : Which groups of voters are typically most and least likely to vote, and why and how can the party be sure that the nomination process will produce a qualified nominee?

Reviews

Write a Review

Finance Basics Questions & Answers

  Calculate basic earnings per share.

Hughes Technology has had net income of $450,000 in current fiscal year. there are 100,000 shares of common stock outstanding with convertible bonds, Determine Hughes's basic earnings per share.

  Which bond should the investor select

One is a corporate bond carrying an 8 percent coupon and selling at par. The other is a municipal bond with a 5½ percent coupon, and it, too, sells at par. Assuming all other relevant factors are equal, which bond should the investor select?

  What is the conversion price pc

Convertible debentures for Kulik Corp. were issued at their $1,000 par value in 2012. At any time prior to maturity on February 1, 2032, a debenture holder can exchange a bond for 25 shares of common stock.

  Disadvantages of a dcf

Looking for realistic projected financial statements over at least one business cycle (7 to 10 years) or until cash flows are "normalized"

  Calculate the expected value

Assume you won the lottery and were offered a choice of either $500,000 in cash or a gamble in which you would get $1 million if a head were flipped but zero if a tail came up.

  Question on project evaluation

ABC company purchased a machine 5 years ago at cost of $100000. The machine had an expected life of 10 years at the time of purchase, and an expected salvage value of $10,000 at the end of the 10 years. Show all workings to justify your answer

  Cash flow from operations in a business

Which is most important to the business and why and what are the consequences a company may face if either of these is ignored?

  What is the rate of return to an investor in the fund

Corporate Fund started the year with a net asset value of $12.50. By year-end, its NAV equaled $12.10. The fund paid year-end distributions of income and capital gains of $1.50. What is the rate of return to an investor in the fund?

  Determine value of a share of coca cola stock

Determine the value of a share of Coca-Cola  stock using only the data.

  Computing value of covered interest arbitrage

Assume the current spot rate is C$1.1875 and the one-year forward rate is C$1.1724. The nominal risk-free rate in Canada is 4 percent while it is 3 percent in the U.S.

  What is your portfolio return

If you have a portfolio made up of 30 percent Company O, 40 percent Company V, and 30 percent Company M, what is your portfolio return?

  What level of pretax cost savings

The device has an estimated Year 5 salvage value of $60,000. What level of pretax cost savings do we require for this project to be profitable?

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