What will be the cash flows for the given project

Assignment Help Finance Basics

Reference no: EM131934132

Question: You have been asked by the president of your company to evaluate the proposed acquisition of a new special-purpose truck for $140,000. The truck falls into the MACRS 3-year class, and it will be sold after 3 years for $14,000. Use of the truck will require an increase in NWC (spare parts inventory) of $4,400. The truck will have no effect on revenues, but it is expected to save the firm $65,000 per year in before-tax operating costs, mainly labor. The firm's marginal tax rate is 35 percent. What will the cash flows for this project be during year 2?

Reference no: EM131934132

Questions Cloud

By how much would the afn for the coming year change : You have been asked to forecast the additional funds needed (AFN) for Houston, Hargrove, & Worthington (HHW), which is planning its operation for the coming.

Advocating a continuous process : Strategic planning horizons have changed from 5 years, to 3 years and even to 1 year. Advocating a continuous process that includes quarterly

Conquering fear and ethical problems : Identify your biggest fear about public speaking. Develop a plan to gain confidence and overcome your fear, then explain how you'll implement your plan.

What is your expected return on investment : Your investment has a 20% chance of earning a 26% rate of return, What is your expected return on this investment?

What will be the cash flows for the given project : You have been asked by the president of your company to evaluate the proposed acquisition of a new special-purpose truck for $140,000.

Paper-based legal health record : Compare and contrast a paper-based legal health record, a hybrid legal health record, and a legal electronic health record.

What is geometric average return of quarterly returns : What is the geometric average return of the following quarterly returns: 5%, 7%, 4%, and 5%?

Determine the appropriate classification for each items : You have been asked to review the December 31, 2016, balance sheet for Champion Cleaning. After completing your review, you list the following three items.

Describe the symbolic frame : 1. Describe the symbolic frame? 2. Explain the major components of the symbolic frame (theories, concepts)

User Account

All Pages