give answer without fail +No. Question1.23A project will incur $700 in shutdown costs theyear after the completion of the project. The taxrate is 35%. What is the tax shield resulting fromthese tax-deductible shutdown costs (where anegative number means a cash outflow and apositive number means an incremental cashinflow)?A project will incur $700 in shutdown costs the yearafter the completion of the project. The tax rate is 35%.What is the tax shield resulting from these tax-deductible shutdown costs (where a negative numbermeans a cash outflow and a positive number means anincremental cash inflow)?An investment of $83 generates after-tax cash flows of$50.00 in Year 1, $72.00 in Year 2, and $125.00 in Year 3.The required rate of return is 20 percent. Find the netpresent value.

Answer : 1 and 2 (Both Question are same) Step 1: Tax Shield:The deductions or expenses for a firm…

Answered: + No. Question 1. 2 3 A project will…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 5PB: Mason, Inc., is considering the purchase of a patent that has a cost of $85000 and an estimated...

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A project will incur $500 in shutdown costs the year after the completion of the project. The tax rate is 25%. What is the tax shield resulting from these tax-deductible shutdown costs (where a negative number means a cash outflow and a positive number means an incremental cash inflow)? Question 4Answer a. $-125 b. $-105 c. $105 d. $125
+ No. Question 1. 2 3 A project will incur $700 in shutdown costs the year after the completion of the project. The tax rate is 35%. What is the tax shield resulting from these tax-deductible shutdown costs (where a negative number means a cash outflow and a positive number means an incremental cash inflow)? A project will incur $700 in shutdown costs the year after the completion of the project. The tax rate is 35%. What is the tax shield resulting from these tax- deductible shutdown costs (where a negative number means a cash outflow and a positive number means an incremental cash inflow)? An investment of $83 generates after-tax cash flows of $50.00 in Year 1, $72.00 in Year 2, and $125.00 in Year 3. The required rate of return is 20 percent. Find the net present value.
7.3 q4- A project will incur $600 in shutdown costs the year after the completion of the project. The tax rate is 30%. What is the value of the after-tax shutdown costs (where a negative number is a net cash outflow and a positive number is an incremental cash inflow)? a. $420 b. $380 c. $-420 d. $-380
A project’s after-tax operating cash flow is $200,000 per year, with operating costs of $100,000 and depreciation of $20,000 per year. The firm’s marginal tax rate is 40%. What are the annual sales revenues from this project (rounded to the nearest dollar)? Select one: a. $200,000 b. $377,143 c. $394,286 d. $420,000 e. $640,000
15 A project will increase sales by $92,800 and cash expenses by $53,200. The project will cost $89,000 and be depreciated using straight-line depreciation to a zero book value over the 4-year life of the project. The tax rate is 35 percent. What is the operating cash flow of the project using the tax shield approach?
1. Textron is considering a NEW project. The financial projections are as follows: Year 0 Year 1 24,000 7,000 Year 2 24,000 Year 3 Sales 24,000 Total Costs 7,000 7,000 Depreciation Capital Investment (or Cost of Equipment) Working Capital (Requirements/Levels) 10,000 10,000 10,000 40,000 2000 2500 1000 The Equipment will be sold at the end of Year 3 for 11,000. The relevant tax rate is 35%. Compute the cash flows for the project. Please select file(s) Select file(s)
Problem 3. Malipol Books is considering the purchase of a new binding equipment that will reduce operating costs. The cost of the equipment will be Php 70,000, which will be depreciated straight line over 5 years to a zero-salvage value. Sales are expected to increase Php 65,000 per year, with an expected cash flow earnings before depreciation and taxes/sales ratio of 60%. What is the expected after-tax cash flows from the project if the tax rate is 40%?
A company expects to need to increase their net working capital by $200,000 at the beginning of a potential project's life. By how much would this event affect the project's terminal cash flow at the end of its expected life if the company's tax rate is 25%? -$200,000 $0 +$150,000 +$200,000
what is the present value of the tax shield for the following project? the initial investment is $300,000. the project will last for 6 years, at which time the asset will be sold for $90,000. the asset will be depreciated on a declining balance basis at a rate of 20 percent. the firm's marginal tax rate is 40 percent. the firm's required rate of return is 8 percent a) 16,204.36 b) 82,539.68 c) 98,744.04 d) 66,335.32
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