Q: The Bread Company is planning to purchase a new machine that it will depreciate on straight-line…
A: The Accounting rate of retrun is calculated with the help of following formula ARR = Average Annual…
Q: Tomoya Inc. announced a tender to supply it with 200,000 pcs of DC Motor per year for its…
A:
Q: Karsted Air Services is now in the final year of a project. The equipment originally cost $24…
A: Given: Cost of equipment = $24 million Depreciated = 100% Tax rate = 30% Sale value = $7 million
Q: St. Johns River Shipyards is considering the replacement of an 8-year-old riveting machine with a…
A: As per the given information: Earnings before depreciation before replacement - $30,000 Earnings…
Q: Daily Enterprises is purchasing a $4.1 million machine. It will cost $66,000 to transport and…
A: Before investing in new asset or project, profitability is evaluated by considering future generated…
Q: $775000, and will last for 5 years. The expected scrap value at the end of 5th year is $140000.…
A: Since you have multiple subparts we solved the first 3 for you . if you want all please repost with…
Q: A company planned to invest $200,000 to add some equipments in it's production line. This new…
A: Net Fixed Assets is the residual value of the fixed asset. If the value obtained from it is low then…
Q: Food Harvesting Corporation is considering purchasing a machine for $1,718,750. The machine is…
A: Introduction: The payback period is the number of years needed to repay the initial financial…
Q: Your firm needs a computerized machine tool lathe which costs $55,000 and requires $12,500 in…
A: Depreciation Tax Shield: It is possible to reduce taxable income by using a depreciation tax shield,…
Q: Ilana Industries Inc. needs a new lathe. It can buy a new high-speed lathe for $1.2 million. The…
A: A method of capital budgeting that helps to evaluate the present worth of cash flow and a series of…
Q: Your company is interested in investing in a new die casting machine. The machine costs $120,000 and…
A: Capital Budgeting Techniques: The techniques that are used to assess prospective investment…
Q: Do you want to complete the equipment retrofit?
A: Present value of Cash outflow = $80000
Q: Holmes Manufacturing is considering a new machine that costs $275,000 and would reduce pretax…
A: Please find the answers to the above questions below:
Q: A company is considering the purchase of a new machine for $50,000, installed. The machine has a tax…
A: For evaluating any new asset or project, cashflows are considered. For overall evaluation cashflows…
Q: Holmes Manufacturing is considering a new machine that costs $275,000 and would reduce pretax…
A: Net present value is the difference between present value of cash inflows and present value of cash…
Q: Marshall-Miller & Company is considering the purchase of a new machine for $60,000, installed.…
A: YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 macrs % 20% 32% 19% 12% 11% 6% depreciation expense…
Q: Holmes Manufacturing is considering a new machine that costs $290,000 and would reduce pretax…
A: "Since you have posted multiple questions with multiple sub-parts, we have solved the first three of…
Q: You firm just bought a new machine. The machine cost $1,800,000. The machine will be operated for 4…
A: Capital Cost Allowance (CCA): It is an annual credit available under the income taxation system on…
Q: Madison Manufacturing is considering a new machine that costs $350,000 and would reduce pre-tax…
A: a.Calculate the NPV, IRR, MIRR, and Payback period as follows:
Q: Your firm needs a computerized machine tool lathe which costs $50,000 and requires $12,000 in…
A: Salvage value is the important component that help us to calculate Annual depreciation. So, after…
Q: Daily Enterprises is purchasing a $10.5million machine. It will cost $46,000 to transport and…
A: Incremental earnings refers to additional savings from incremental net revenues. Incremental…
Q: Your firm needs a computerized machine tool lathe which costs $56,000 and requires $12,600 in…
A:
Q: Y Company is considering purchasing a machine for $15,000. The machine will generate a net after-tax…
A: The payback period is one of the capital budgeting technique which use to evaluate the project based…
Q: A production machine costs $40,000 and has a 7-year useful life. At the end of 7 years, it can be…
A: Hello. Since your question has multiple parts, we will solve first question for you. If you want…
Q: St. Johns River Shipyards is considering the replacement of an 8-year-old riveting machine with a…
A: Replacing machinery may be a huge capital expense for the firm or enterprise therefore a lot of…
Q: 10. Marshall-Miller & Company is considering the purchase of a new machine for $60,000, installed.…
A: Allocation of the cost of the asset over the useful life of that asset is term as depreciation. It…
Q: You have been asked to evaluate the proposed acquisition of a new Machine for your company. The…
A: Net present value is the sum of present value of cash flows. Present value = cash flows/(1+discount…
Q: Your new employer, Freeman Software, is considering a new project whose data are shown below. The…
A: Cash flow for a particular project is the cash revenues generated by business reduced by the cash…
Q: A manufacturing company plans to buy a new piece of equipment for $70,000 which is expected to last…
A: The present value is the value of the sum received at time 0. It is the current value of the sum…
Q: St. Johns River Shipyards is considering the replacement of an 8-year-old riveting machine with a…
A: MPV is the difference between present value of all cash inflows and initial investment NPV =PV of…
Q: The NUBD Co. is planning to purchase a new machine for P300,000. The payback period is expected to…
A:
Q: Karsted Air Services is now in the final year of a project. The equipment originally cost $31…
A: In the given question we need to calculate the after tax salvage value.
Q: The Shellout Corp. owns a piece of petroleum drilling equipment that costs $300,000 and will be…
A: The usage of IRR is done to make a profit analysis. It further helps in deciding the capital…
Q: Wilson Corp, is considering the purchase of a new piece of equipment. The cost savings from the…
A: Net present value is one of the important calculation done in capital budgeting. Under this, present…
Q: Karsted Air Services is now in the final year of a project. The equipment originally cost $33…
A: Original cost of equipment = $33 million Total depreciation on equipment =$33 millions * 75% =…
Q: St. Johns River Shipyards is considering the replacement of an 8-year-old riveting machine with a…
A: NPV is the method under which cash inflows that are received during the lifetime of a project are…
Q: Your firm needs a machine which costs $250,000, and requires $46,000 in maintenance for each year of…
A: Seven years macrs depreciation 1 years =14.29 2 year=24.49 3 year=17.49 4 year =12.49 5 year =8.93…
Q: ACE Ltd is evaluating whether it should invest in a machine that costs $100,000. The machine would…
A: Operating cash flows is the cash flow generated from normal operations of business. It can be…
Q: The Lumber Yard is considering adding a new product line that is expected to increase annual sales…
A: Depreciation Tax shield = Tax rate x Depreciation Expense Depreciation Expense = Cost - Salvage…
Q: The ABC company is considering purchasing a machine that costs $280,000 and expected to yield…
A: Net Income = Revenue - Expenses - Taxes Depreciation = Cost of Machinery - Residual ValueUseful Life…
Q: Ilana Industries Inc. needs a new lathe. It can buy a new high-speed lathe for $1 million. The lathe…
A: NPV is the net current worth of cash outflows and cash inflows. It is calculated by subtracting PV…
Q: Your firm needs a computerized machine tool lathe which costs $50,000 and requires $12,000 in…
A: depreciation tax shield=tax×depreciation expense
Q: Your firm needs a machine which costs $120,000, and requires $33,000 in maintenance for each year of…
A: Depreciation rate in year 5 = 11.52% (MARC Table 5-year class life category)
Q: Your firm needs a machine which costs $210,000, and requires $36,000 in maintenance for each year of…
A: Computation of tax shield on depreciation: Depreciation=Cost of asset×Depreciation rate for year…
Q: llana Industries, Inc., needs a new lathe. It can buy a new high-speed lathe for $0.97 million. The…
A: NPV is method for determining the current value of the cash flows, which have been generated by the…
Q: St. Johns River Shipyards is considering the replacement of an 8-year-old riveting machine with a…
A: Net present value refers to the present value of the series of cash flows that occur at different…
Q: Your firm needs a computerized machine tool lathe that costs $50,000 and requires $12,000 in…
A: Working note:
Q: A corporation is considering a proposal for the purchase of a machine that will save $130,000 per…
A: Capital budgeting techniques are the methods that are used to evaluate various alternatives of…
FULL QUESTIONS:
Ilana Industries Inc. needs a new lathe. It can buy a new high-speed lathe for $1 million. The lathe will cost $35,000 per year to run, but it will save the firm $125,000 in labor costs and will be useful for 10 years. Suppose that for tax purposes, the lathe is entitled to 100% bonus depreciation. At the end of the 10 years, the lathe can be sold for $100,000. The discount rate is 8%, and the corporate tax rate is 21%. What is the
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 1 images
- The Rodriguez Company is considering an average-risk investment in a mineral water spring project that has an initial after-tax cost of 170,000. The project will produce 1,000 cases of mineral water per year indefinitely, starting at Year 1. The Year-1 sales price will be 138 per case, and the Year-1 cost per case will be 105. The firm is taxed at a rate of 25%. Both prices and costs are expected to rise after Year 1 at a rate of 6% per year due to inflation. The firm uses only equity, and it has a cost of capital of 15%. Assume that cash flows consist only of after-tax profits because the spring has an indefinite life and will not be depreciated. a. What is the present value of future cash flows? (Hint: The project is a growing perpetuity, so you must use the constant growth formula to find its NPV.) What is the NPV? b. Suppose that the company had forgotten to include future inflation. What would they have incorrectly calculated as the projects NPV?Dauten is offered a replacement machine which has a cost of 8,000, an estimated useful life of 6 years, and an estimated salvage value of 800. The replacement machine is eligible for 100% bonus depreciation at the time of purchase- The replacement machine would permit an output expansion, so sales would rise by 1,000 per year; even so, the new machines much greater efficiency would cause operating expenses to decline by 1,500 per year The new machine would require that inventories be increased by 2,000, but accounts payable would simultaneously increase by 500. Dautens marginal federal-plus-state tax rate is 25%, and its WACC is 11%. Should it replace the old machine?Ilana Industries Inc. needs a new lathe. It can buy a new high-speed lathe for $1.2 million. The lathe will cost $37,000 per year to run, but it will save the firm $136,000 in labor costs and will be useful for 10 years. Suppose that for tax purposes, the lathe is entitled to 100% bonus depreciation. At the end of the 10 years, the lathe can be sold for $210,000. The discount rate is 8%, and the corporate tax rate is 21%. What is the NPV of buying the new lathe? *This is finance (using excel and NPV calculations) not accounting*
- Ilana Industries Incorporated needs a new lathe. It can buy a new high-speed lathe for $2.0 million. The lathe will cost $31,000 per year to run, but it will save the firm $184,000 in labor costs and will be useful for 10 years. Suppose that, for tax purposes, the lathe is entitled to 100% bonus depreciation. At the end of the 10 years, the lathe can be sold for $470,000. The discount rate is 10%, and the corporate tax rate is 21%. What is the NPV of buying the new lathe? Note: A negative amount should be indicated by a minus sign. Enter your answer in dollars not in millions. Do not round intermediate calculations. Round your answer to 2 decimal places. NPVIlana Industries Incorporated needs a new lathe. It can buy a new high-speed lathe for $1 million. The lathe will cost $35,000 per year to run, but it will save the firm $125,000 in labor costs and will be useful for 10 years. Suppose that, for tax purposes, the lathe is entitled to 100% bonus depreciation. At the end of the 10 years, the lathe can be sold for $100,000. The discount rate is 8%, and the corporate tax rate is 21%. What is the NPV of buying the new lathe? Note: A negative amount should be indicated by a minus sign. Enter your answer in dollars not in millions. Do not round intermediate calculations. Round your answer to 2 decimal places.A company is considering the purchase of a new machine for $50,000, installed. The machine has a tax life of 5 years, and it can be depreciated according to the depreciation rates below. The firm expects to operate the machine for 4 years and then to sell it for $5,000. If the marginal tax rate is 40%, what will the after-tax salvage value be when the machine is sold at the end of Year 4? Year Depreciation Rate 1 0.20 2 0.32 3 0.19 4 0.12 5 0.11 6 0.06 Group of answer choices $6,464 $6,720 $7,232 $5,504 $6,400
- Michelle Amabo Company is planning to buy a new machine that can produce additional 20,000 units of product per year. The product sells for P50 each. The cost associated with the product is P30 per unit, exclusive of depreciation on the new machine. The new machine which is expected to last for 10 years will cost P500,000. No salvage value is expected to be recovered at the end of its life. The income tax rate is 35%. Required: 1. Accounting net income 2. Annual net cash inflows from the new machine.Ilana Industries, Inc., needs a new lathe. It can buy a new high-speed lathe for $1.4 million. The lathe will cost $49,000 per year to run, but it will save the firm $144,000 in labor costs and will be useful for 10 years. Suppose that for tax purposes, the lathe will be depreciated on a straight-line basis over its 10-year life to a salvage value of $450,000. The actual market value of the lathe at that time also will be $450,000. The discount rate is 10%, and the corporate tax rate is 20%. What is the NPV of buying the new lathe? (A negative amount should be indicated by a minus sign. Enter your answer in dollars not in millions. Do not round intermediate calculations. Round your answer to 2 decimal places.)You firm just bought a new machine. The machine cost $1,800,000. The machine will be operated for 4 years. It will then be sold for its salvage value of $100,000. The CCA rate is 22%. The tax rate is 34%. The required rate of return is 9% compounded annually. The asset class will remain open. What is the present value of the CCA tax shield? Assume the half-year rule is in effect. Your answer should be accurate to two decimal places. Your Answer:
- Marshall-Miller & Company is considering the purchase of a new machine for $60,000, installed. The machine has a tax life of 5 years, and it can be depreciated according to the depreciation rates below. The firm expects to operate the machine for 5 years and then to sell it for $18,500. If the marginal tax rate is 40%, what will the after-tax salvage value be when the machine is sold at the end of Year 5? Complete the table -THIS QUESTION WILL BE ON THE FINAL EXCEPT WITH DIFFERENT NUMBERS. You will fill in the entire table. I am giving you a few numbers to help you check your work Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 MACRS % 20% 32% 19% 12% 11% 6% 7,200 Depreciation expense Book value 48,000 3,600 $0 If we sell at the end of year 5 for $18,500 then determine if we have a gain or a loss and the appropriate tax consequence Gain of 14,900 tax owed is $5,960Marshall-Miller & Company is considering the purchase of a new machine for $50,000, installed. The machine has a tax life of 5 years, and it can be depreciated according to the depreciation rates below. The firm expects to operate the machine for 4 years and then to sell it for $15.500. If the marginal tax rate is 20%, what will the after-tax salvage value be when the machine is sold at the end of Year 4? Depreciation Rate 0.20 0.32 Year 1 2 3 4 56 0.19 0.12 0.11 0.00llana Industries, Inc., needs a new lathe. It can buy a new high-speed lathe for $0.97 million. The lathe will cost $31,300 to run, will save the firm $127,700 in labour costs, and will be useful for 10 years. Suppose that for tax purposes, the lathe will be in an asset class with a CCA rate of 25%. llana has many other assets in this asset class. The lathe is expected to have a 10-year life with a salvage value of $91,000. The actual market value of the lathe at that time will also be $91,000. The discount rate is 15% and the corporate tax rate is 35%. What is the NPV of buying the new lathe? (Round your answer to the nearest cent.) NPV $
