49.) Kore Industries is analyzing a capital investment proposal for new equipment to produce a product over the next 8 years. The analyst is attempting to determine the appropriate "end-of-life" cash flows for the analysis. At the end of 8 years, the equipment must be removed from the plant and will have a net book value of zero, a tax basis of P75,000, a cost to remove of P40,000, and scrap salvage value of P10,000. Kore's effective tax rate is 40%. What is the appropriate "end-of-life" cash flow related to these items that should be used in the analysis? P27,000 inflow P18,000 outflow P45,000 outflow P12,000 infloW a. b. С. d.

We assume that the company that you selected is considering a new project. The project has 8 years' life. This project requires an initial investment of $580 million to purchase equipment, and $30 million for shipping & installation fees. The fixed assets fall in the 7-year MACRS class. The salvage value of the fixed assets is 10% of the purchase price (including the shipping & installation fee). The number of units of the new product expected to be sold in the first year is 2,660,000 and the expected annual growth rate is 10.5%. The sales price is $280 per unit and the variable cost is $225 per unit in the first year, but they should be adjusted accordingly based on the estimated annualized inflation rate of 3.0%. The required net operating working capital (NOWC) is 11.8% of sales with the corporate tax rate of 21%. The project is assumed to have the same risk as the corporation, so 5.35% is the discount rate for this hypothetical project. Estimate annual cash flows for the 8 years.…

Giant Machinery Ltd is considering to invest in one of the two following Projects to buy a new equipment. Each project will last 5 years and have no salvage value at the end. The company’s required rate of return for all investment projects is 9%. The cash flows of the projects are provided below.   Project 1Cost $175,000 Project 2 Cost $185,000 Future Cash Flows For Project 1 Year 1 Year 2 Year 3 Year 4 Year 5  is 76,000 83,000 67,000 65,000 55,000 respectively. For Project 2 it is  87,000 78,000 69,000 65,000 57,000 for Year 1 Year 2 Year 3 Year 4 Year 5 resp.  Required: a) Identify which project should the company accept based on NPV method. (Note: Please round up the result of each calculation of PV to 2 decimal places only for simplification)  b) Identify which project should the company accept based on simple pay back method if the payback criteria is maximum 2 years.  c) Which project Giant Machinery should choose if two methods are in conflict

Blossom Company is considering buying a new farm that it plans to operate for 10 years. The farm will require an initial investment of $11.95 million. This investment will consist of $2.60 million for land and $9.35 million for trucks and other equipment. The land, all trucks, and all other equipment are expected to be sold at the end of 10 years for a price of $5.20 million, which is $2.25 million above book value. The farm is expected to produce revenue of $2.05 million each year, and annual cash flow from operations equals $1.95 million. The marginal tax rate is 25 percent, and the appropriate discount rate is 9 percent. Calculate the NPV of this investment. (Do not round factor values. Round final answer to 2 decimal places, e.g. 5,275.25.) NPV $ The project should b accepted rejected

Moose Pastures Inc. is considering a seven-year project to improve its production efficiency. Buying a new assembly machine for $708, 000 is estimated to result in $213,000 in annual pre-tax cash flows. The machine has a CCA rate of 30% per year, and it will have a salvage value of $70,000 at the end of the project. The machine also requires an initial investment in inventory of $20, 000 (in year zero), which will be recovered at the end of the project (in year 7). If the tax rate is 40% and the discount rate is 10%, what is the NPV of the machine purchase? (Assume the CCA pool remains open and that there are no capital gains/losses.) Correct answer is $132, 337. (My question) Hi I am confused on how it got 132, 337. I know there's a formula but can you walk me through the steps to get this correct answer?

Crane Company is considering buying a new farm that it plans to operate for 10 years. The farm will require an initial investment of $12.10 million. This investment will consist of $2.65 million for land and $9.45 million for trucks and other equipment. The land, all trucks, and all other equipment are expected to be sold at the end of 10 years for a price of $5.15 million, which is $2.20 million above book value. The farm is expected to produce revenue of $2.10 million each year, and annual cash flow from operations equals $2.00 million. The marginal tax rate is 25 percent, and the appropriate discount rate is 9 percent. Calculate the NPV of this investment. (Do not round factor values. Round final answer to 2 decimal places, e.g. 5,275.25.) NPV LA