Answered: eer. The annual depreciation will be…

eer. The annual depreciation will be $14,250 and the tax rate is 24 percent. What is the operating cash flow for this project?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: Explain why the after-tax cashflow is the cash inflow in this project.

A: There are two types of Cash Flow Cash inflow Cash outflow Cash Inflow refers to the cash received…

Q: Define the term Salvage value and gains tax?

A: Depreciation: The term depreciation refers to the fall in monetary value of assets due to its use,…

Q: levant details of an investment decision are given below. Initial Investment 10 lacs, Cost of…

A: Given: Initial Investment=10 lacs Cost of capital=9% Tax rate=20% To calculate: Payback period and…

Q: the present worth, / for the annual interest as a decimal number, and in for the number of years.)…

A: The annual worth is the net of all the profits and costs incurred over one year. Thus, we present…

Q: Marco has an asset valued $100 now. There is a 20% depreciation rate. Landing the asset is possible,…

A: Correct: By doing nothing, Marco can consume $68 now and $80 later. However, the statement about…

Q: You and your business partners are considering applying for a franchise. If approved, you expect…

A: Economic term uses the word "opportunity cost" to describe the worth of what you must forgo in order…

Q: Julie Magnolia has $50,000 cash to invest for three years. Two types of bonds are available for…

A: (a) The interest rate can be calculated as follows. Thus, the interest rate is 12.67%.

Q: If the appropriate discount rate for this project is 14%, then the net present value (NPV) is…

A: Given interest rate = 14% Present value of each cash flow = cashflow /(1 + rate)^time For year 0 =…

Q: 2. A tax and duty free importation of a 30 HP sandmill cost P 360,000. Bank charges arrastre and…

A: Below we used SLM to solve the given problem. The straight-line premise is a strategy for working…

Q: Ilana Industries, Inc., needs a new lathe. It can buy a new high-speed lathe for $1.08 million. The…

A: A financial statistic called Net Present Value (NPV) serves as a financial future vision for making…

Q: Define the PW and AE concepts?

A: Preset value refers to the current value of future sum of money in lump sum or in installments with…

Q: Determine whether the following contract described below is worthwhile of undertaking after taxes if…

A: A minimum acceptable rate of return (MARR) is the minimal profit an investor expects to make from an…

Q: 25 true or false Under D/P after sight, when the importer makes payment the collecting bank will…

A: DP- It is the term used at sight for the payment. It was made before the release of documents from…

Q: A company produces circuit boards, the taxes cost the company $50,000 per year. The materials used…

A: Profit: Profit is a monetary gain that is realized when a company or organization's revenue…

Q: Q7.Jett Gas LLC has total sales of $1,479,600 and costs of $914,300. Depreciation is$41,650 and the…

A: Operating cash flow (OCF) is a measure of the amount of cash generated by a company's normal…

Q: A tax- and duty-free importation of a 30 HP sandmill (for paint manufacturing) cost P 360,000, CIF…

A: A typical form of depreciation that reduces the value of a fixed asset over the course of its useful…

Q: It cost k depreciation life CRS property class age value A $8,000 $8,000 $8,000 $8,000 $8,000 $8,000…

A: The expected decline in value of a fixed asset over the course of a fiscal year is represented by…

Q: ⦁ ABC Company has a product that sells for $400 per unit and its variable cost per unit is $260.…

A: sales per unit = $400 cost per unit = $260 Company’s fixed cost = $840,000

Q: A rural community/company is considering an investment in a cottage industry for which the net cash…

A: When discount rate = 10%, NPV = - 5000 + 1500 x P/F(10%, 1) + 1300 x P/F(10%, 2) + 1800 x P/F(10%,…

Q: Spirit Of New York Cruise line offers nightly dinner cruises departing from Manhattan or Lincoln…

A: The difference between the selling price and the variable cost per unit is the contribution margin…

Q: Your company is currently considering an acceleration program to enhance the timing of production…

A: The present value defines the current worth of a future sum of money, discounted at a specific rate…

Q: Pertinent information for two alternatives A and B is shown below. If i=10% / year and the effective…

A: Calculation of Net Income chargeable to Tax in Year 3 for Alt. A (GI) $ Gross Income…

Q: You want to implement an automatic control in the production process of a factory. The cost Initial…

A: Initial cost=130000Annual savings=60000 per yearLife=10 yearsTax rate=50%MARR=10%

Q: An asset with 5-year MACRS life will be purchased for $15,000. It will produce net annaul benefits…

A: If you like my answer please upvote

Q: Xon, a small oil company, purchased a new petroleum drilling rig for $2,000,000. Xon will depreciate…

A: Answer; Working

Q: 2. Allwhite Company sells its single product for P30 per unit. The contribution margin ratio is 45%,…

A: Total Revenue refers to the total amount of money that the producer or seller receives for selling…

Q: A project requires an initial investment of BD .1 80,000, has a salvage value of BD 10,000 after 3…

A: Given that; Initial investment= BD 180000 Annual expenses=BD2000 Salvage value=BD 10000 Life(n) =3…

Q: Your company is considering purchasing a new machine. An investment of $200,000 will produce an…

A: Step 1: Before tax cashflow = initial annual benefit of $45,000 less the decline of $2,500 each…

Q: wo fadures are being considered for a particular job in a manufacturing firm. The pertinent data for…

A: Given information Fixture X Capital investment= $35000 Annual cost=$6000 Useful life=6 years Market…

Q: A certain equipment hou o prst cact of P900,000 life 8 years and o. sONage Voue of P200,000 what is…

A: First Cost = 900,000 time period = 8 years Salvage Value = 200,000

Q: A European candy manufacturing plant manager must select a new irradiation system to ensure the…

A: Cost is the amount of money that is paid in the production process on rent, wages, interest, and…

Q: The first cost of a 3D printer (computer equipment) is $26,000 with operating costs of $0.27 per…

A: Year Particular Cash Outflow PV @14% Pv cost 0 First cost 26,000.00 1.000000…

Q: ITEM: MACHINE A: MACHINE B: First Cost P2,000,000.00 P3,000,000.00 Annual operating P325,000.00…

A: The annual worth method or AW method implies that all the incomes along with disbursements, regular…

Q: On 3/15/18 Brian donated a painting worth $500,000 to an art museum. If Brian, had sold the painting…

A: The charitable contribution is $500,000

Q: Assuming 25% tax rate, 20% CCA rate and 10% discount rate, recommend the better of the following…

A: Present worth (PW) is the current value of a future cash flow or stream of cash flows. It is…

Q: Calculate all applicable documentary stamp taxes and intangible taxes associated with financing the…

A: Documentary Stamp Tax: a charge on the transfer of an obligation or right or property shown by a…

Q: op an ATCF for problem 3, if 50% of the initial investment is borrowed a nual interest rate of 5% to…

A: *Answer: *4

Q: A firm must decide between two designs. Their effective income tax rate is 15%, and MACRS…

A: The annual worth or AW method refers to the value for an alternative, comprising of two prime…

Q: Solve all this question......you will not solve all questions then I will give you down?? upvote...

A: The objective of this question is to determine the projected after-tax rate of return for a…

Q: BigCo is considering leasing the new equipment that it requires, for $151,000 a year, payable in…

A: To decide whether to lease or buy the equipment, BigCo needs to compare the present value of the…

Q: Assume the purchase price of a combine is $250,000. It is estimated to have a salvage value of…

A: please find the answer below.

Q: A new machine is to be purchased for $200,000. The company believes it will generate $75,000…

A: Given information Initial cost=$200000 Annual revenue=74000 Labor cost =25000 and increase by 1000…

Question

A cost-cutting project will decrease costs by $64300 a year. The annual depreciation will be $14,250 and the tax rate is 24 percent. What is the operating cash flow for this project?
Mugle Choce
O
O
$52136
$48,70
$45.296
$11.964
$1,804

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Define Cash Flow:

VIEW

Step 2: Calculate Operating Cash Flow:

VIEW

Solution

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

1. Someone bought a house $400,000 in cash of which $100,000 is the value of the property. The property is rented out for 5k monthly and it cost 500 a month to maintain. He pays 38% in contributions. He plans to totally depreciate the property after 20 years, using the straight line depreciation . What is the vnet annual income from contributors? 2. A company bought a machine with an initial cost of $1million with a salvage value of 100,000 in year 10, it was sold in y5 for 1.2 million a) what are the tax implications of this sale? fully depreciated with a 100%bonus + straight line depreciations the firm that owns the machine pays corporate income taxes at crate of 40% and a capital gains taxes at a rate of 10%
A startup is considering buying a $295,000 piece of equipment. If it purchases the equipment, it will take a loan for the entire amount; the interest on the loan is 2%, and the loan will be repaid in 5 equal end of year payments. The startup estimates that the equipment would generate an additional $170,000 of revenue each year. At the end of 5 years, the equipment would have a salvage value of $21,000. The tax rate is 24%. Assuming a planning horizon of 5 years, that the equipment is depreciated using MACRS (3-year property class), and that the medical practice uses an after-tax MARR of 9%, compute the PW and determine whether the startup should invest in the equipment. Click here to access the TVM Factor Table calculator. Click here to access the MACRS-GDS Property Classes. Click here to access the MACRS-GDS percentages page. Click here to access the MACRS-GDS percentages for 27.5-year residential rental property. $ Carry all interim calculations to 5 decimal places and then round…
The initial investment in the equipment needed for the project is $50,000 for a duration of 10 years. Salvage is estimated at $5,000. Calculate the depreciation charges and book values for year three of the asset using SL? O a. $6400, $25600 O b. $7200, $28800 O c. $728, $47784 O d. $4500, $36500
ABC Telecom wants to launch a new product. it is observed that the fixed cost of the new product is $35,000 and the variable cost per unit is $500. The revenue function for the sale of D unit is 5000D - 100D. What is the maximum profit of the company? $Blank 1 Blank 1 Add your answer
7
1
which is an example of something that could go wrong during te municipal entitelement or permitting phase of development O NIMBYIsm- the community does not support the project O there is a lien on the property O 20- year amortization term none of the above
Updated class practice problem to include state tax and proper consideration of asset disposal (1/2 depreciation and need BV to determine recapture or loss) GIVENS: Initial Cost $150,000 Annual net saving $50,000 state Useful life 6 years federal 6.50% 21.0% Salvage value $30,000 tax rate BTCF-D TI tax rate BTCF-Income Tax Year Taxable BTCF MACRS Depreciation Income Income Tax ATCF 0 ($150,000) ($150,000) 1 50,000 20% ($30,000) $20,000 $4,618 45,382 2 50,000 32% ($48,000) $2,000 $462 49,538 3 50,000 19.20% ($28,800) $21,200 $4,895 45,105 4 50,000 11.52% ($17,280) $32,720 $7,555 42,445 5 50,000 11.52% ($17,280) $32,720 $7,555 42,445 6 50,000 2.88% ($4,320) $45,680 $10,548 63,523 indudes 6 and disposal disposal 30,000 BV= $4,320 $25,680 $5,930 recapture ROR Question 1 What is the ATCF ROR when state taxes and asset disposal are properly considered?
A consumer electronics company was formedto develop cell phones that run on or are rechargedby fuel cells. The company purchased a warehouseand converted it into a manufacturing plant for$6,000,000. It completed installation of assemblyequipment worth $1,500,000 on December 31st. Theplant began operation on January 1st. The companyhad a gross income of $8,500,000 for the calendaryear. Manufacturing costs and all operating expenses,excluding the capital expenditures, were $2,280,000.The depreciation expenses for capital expendituresamounted to $456,000.(a) Compute the taxable income of this company.(b) How much will the company pay in federalincome taxes for the year?
Daily Enterprises is purchasing a $10.2 million machine. It will cost $51,000 to transport and install the machine. The machine has a depreciable life of 5 years and will have no salvage value. The machine will generate incremental revenues of $3.8 million per year along with incremental costs of $1.1 million per year. If Daily's marginal tax rate is 21%, what are the incremental earnings (net income) associated with the new machine? The annual incremental earnings are $ (Round to the nearest dollar.)
Consider a project to supply Detroit with 27,000 tons of machine screws annually for automobile production. You will need an initial $4,600,000 investment in threading equipment to get the project started; the project will last for 5 years. The accounting department estimates that annual fixed costs will be $1,100,000 and that variable costs should be $205 per ton; accounting will depreciate the initial fixed asset investment straight-line to zero over the 5-year project life. It also estimates a salvage value of $475,000 after dismantling costs. The marketing department estimates that the automakers will let the contract at a selling price of $308 per ton. The engineering department estimates you will need an initial net working capital investment of $440,000. You require a return of 12 percent and face a tax rate of 23 percent on this project. a. Suppose you’re confident about your own projections, but you’re a little unsure about Detroit’s actual machine screw…
Calculate the payback period