What will the cash flows for project be for year three

Assignment Help Financial Management
Reference no: EM131918030

You have been asked by the president of your company to evaluate the proposed acquisition of a new special-purpose truck for $60,000. The truck falls into the MACRS 3-year class, and it will be sold after three years for $20,600. Use of the truck will require an increase in NWC (spare parts inventory) of $2,600. The truck will have no effect on revenues, but it is expected to save the firm $20,200 per year in before-tax operating costs, mainly labor. The firm’s marginal tax rate is 34 percent.

What will the cash flows for this project be for year 3? (Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places.)

Reference no: EM131918030

Questions Cloud

The companys efforts to contain costs : Do you think this increases that firm's efficiency, or does it hamper the company's efforts to contain costs and be more competitive? Why?
What factors illustrate human advancement : Choose a critical human advancement from a time and place in our class historical timeline (1600 to present). First what factors illustrate human advancement
What has been personal experience with e-mail advertising : What has been your personal experience with e-mail advertising? Are you part of any opt-in lists whereby you receive regular (say once a week) e-mail messages?
Whats your take on the discussion of racism in america : Morrison's work provides a unique and useful way of reading and re-examining American literature, asking us to consider both the black presence.
What will the cash flows for project be for year three : What will the cash flows for this project be for year 3?
Discuss about the e-mail advertising : One virtue of e-mail advertising is that different messages for the same product or service can be mailed to various customer groups who differ with respect.
The price of credit default swap : The price of a credit default swap (CDS) on a AAA-rated bond would be higher than the price of an otherwise identical BB-rated bond.
What is the net present value of the investment : What is the net present value of the investment using a discount rate of 12%, rounded to the nearest dollar?
Discuss effectiveness of the e-mail viral marketing practice : E-mail advertising is claimed to be very effective for viral marketing purposes-that is, buzz generation. This is accomplished by requesting an e-mail.

Reviews

Write a Review

Financial Management Questions & Answers

  Capitates environment to fee-for-service environment

Which of the following is most likely a fixed cost? Which of the following is most likely a variable cost? Comparing a capitates environment to a fee-for-service environment; in a capitates environment. In a multi-service facility, which of the follo..

  Diversified portfolio consisting

Suppose you held a diversified portfolio consisting of a $7,500 investment in each of 20 different common stocks. What would your portfolio's new beta be?

  Do you think there is any risk associated with a strategy

Do you use money to invest that could have been used to pay off a credit card loan? If so, why? Do you think there is any risk associated with such a strategy?

  What is the risk structure of interest rates

What is the risk structure of interest rates? How is risk defined in a financial sense? Discuss the general relationship between risk and expected return.

  Materials stocks tend to do the best during

Examples of consumer discretionary stocks include. Materials stocks tend to do the best during.

  The current yield-what is it for this bond

Bonds of similar risk are currently earning 9.22% rate of return There is a particular yield known as the “current yield” What is it for this bond?

  How much will audreys balloon payment be in eight years

Audrey Sanborn has just arranged to purchase a $530,000 vacation home in the Bahamas with a 20 percent down payment. The mortgage has a 5.9 percent stated annual interest rate, compounded monthly, and calls for equal monthly payments over the next 30..

  Exchange rate between the Japanese yen and the US dollar

The exchange rate between the Japanese yen and the U.S. dollar is 100.25 yen = 1U.S$. How can a company protect itself against exchange rate risk?

  Why firms have dramatically different market to book ratio

The stock of Jenkins Corporation, a major steel producer, is currently selling for $50 per share. The book value per share is $125.- Why do these two firms have such dramatically different market-to-book ratios?

  What are some investment opportunities such as stocks

What are some investment opportunities such as stocks, options or corporate bonds for General Motors and Ford? Why?

  Proposed development of standards to measure performance

About the proposed development of standards to measure performance and to reward superior performance in her department.

  Explain why investors behaved in the given manner

Explain why investors behaved in this manner. Why does the IFE suggest that South East Asian countries would not have attracted foreign investment before Asian crisis despite high interest rates prevailing in those countries?

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