Project YearMACRSDepreciation RateYear 0 Year 133.33% 44.45%Year 214.81%Year 37.41%A machine is purchased for $850,000 and is used through the end of Year 2. Themachine will be depreciated using the 3-Year MACRS schedule in the table above. Atthe end of Year 2, the machine is sold for $75,000. What is the after-tax cash flowfrom the sale of the machine at the end of Year 2 if the firm's marginal tax rate is35%?O $57,962$70,795O $79,608O $55,998O $62,985O $75,000

MACRS refers to the Modified Accelerated Cost Recovery System.Under MACRS,Annual depreciation = Cost…

Answered: Project Year MACRS Year 0 Depreciation…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 16EA: Project B cost $5,000 and will generate after-tax net cash inflows of $500 in year one, $1,200 in...

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Project B cost $5,000 and will generate after-tax net cash inflows of $500 in year one, $1,200 in year two, $2,000 in year three. $2,500 in year four, and $2,000 in year five. What is the NPV using 8% as the discount rate? For further instructions on net present value in Excel, see Appendix C.
What is the NPV of a project that costs $100,000 provides $23,000 in cash flows annually for 6 years, requires a $5,000 increase in net working capital, and depreciates the asset straight-line over 6 years? The discount rate is 14% a) - $15,560.04 b) $14,782.09 c) -$13,282.71 d) $3,411.14
A potential project involves an initial investment in machinery of RO.1,000,000 and has the following cash inflows:Year 1 – RO.250,000Year 2 – RO.350,000Year 3 – RO.200,000Year 4 – RO.400,000At the end of year 4, the machinery will be sold for RO.600,000.Calculate the accounting rate of return based on average investment.NOTE (DEDUCT THE DEPRECIATION TO ARRIVE AT THE CORRECT AVERAGE PROFIT) a. None of the options b. 35% c. 20% d. 25% Clear my choice
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Project the OCFs for the next three years considering incomes of $165k, $170K and $180 respectively, and a depreciation of $15K, $16K and $18K respectively. Consider a tax of 25%. (Use the following format: "$11.111; $11.111; $11.111) Answer. $65.588;$69.325;$76.800 Then, calculate the NPV (of the three years projected, don't include the current one) if your investment is $150K and the cost of opportunity is 10% (use the following format: $11.111) Answer $24.619 Decide if you invest or not in this project (use the following format: "Yes" or "No") Answer NoI need the process please
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3 IS Book Ask rint rences to search Answer each independent question, (a) through (e), below. a. Project A costs $7,000 and will generate annual after-tax net cash inflows of $2,850 for 5 years. What is the payback period for this investment under the assumption that the cash inflows occur evenly throughout the year? (Round your answer to 2 decimal places.) b. Project B costs $7,000 and will generate after-tax cash inflows of $950 in year 1, $1,850 in year 2, $2,900 in year 3, $2,850 in year 4, and $2,900 in year 5. What is the payback period (in years) for this investment assuming that the cash inflows occur evenly throughout the year? (Round your answer to 2 decimal places.) c. Project C costs $7,000 and will generate net cash inflows of $3,250 before taxes for 5 years. The firm uses straight-line depreciation with no salvage value and is subject to a 30% tax rate. What is the payback period under the assumption that all cash inflows occur evenly throughout the year? (Round your…
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A project requires an increase of $2100 in Net Working Capital at the beginning of the project, which will be fully recovered after the completion of the project. Equipment with a book value of $11,000 will be sold at the end of the project for a salvage value of $6,000. The tax rate is 20%. What is the incremental free cash flow in the year following the end of the project? Question 3Answer a. $9100 b. $7100 c. $4900 d. $2900
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