Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

problem: ABC Company is considering replacing printing equipment. The old equipment can be sold for $450,000, it has a book value of $300,000 and its remaining useful life is three years with zero expected salvage value & has been depreciated by $100,000 per year, apply the straight line method. The new equipment will cost $1,000,000. It will be depreciated by the straight line method over a four years recovery period with an expected salvage value of $150,000, & it require an increase in net working capital of $95,000. Annual saving of electricity, labor & materials from use of the new equipment is estimated at $395,000. The company is in a 35% tax bracket, & its cost of capital is 10.5%.

[A] Determine the initial outlay [cash flow]?
[B] Determine the annual cash flows?
[C] Should the new equipment be purchased?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M918202

Have any Question? 


Related Questions in Basic Finance

1 what is the main advantage of the typical optimization

1. What is the main advantage of the typical optimization technique in comparison to simulation? 2. At what point in the typical analysis does the technique give way to the managerial review and evaluation process? 3. Co ...

1 what are order effects and how does counterbalancing help

1. What are order effects, and how does counterbalancing help us deal with them? 2. Distinguish between treatment, confound, and error variance. 3. Which is worse--confound variance or error variance? Why?

1 give a simple definition of earnings per share2 assume

1. Give a simple definition of earnings per share. 2. Assume that a corporation is a nonpublic company. Comment on the requirement for this firm to disclose earnings per share. 3. Keller & Fink, a partnership, engages in ...

1 what does the reliability coefficient of a measure

1. What does the reliability coefficient of a measure indicate if it is .60? .OO? 1.00? 2. What does a correlation coefficient tell us? Why are correlation coefficients useful when assessing reliability? 3. What are the ...

Briefly describe each of the following developments in

Briefly describe each of the following developments in accounts payable and disbursements. a. Integrated accounts payable b. Purchasing/procurement cards c. Imaging services d. Fraud prevention in disbursements.

1 what is the equation of exchange is the equation of

1. What is the equation of exchange? Is the equation of exchange a theory? Briefly explain. 2. What is the quantity theory of money? What does the quantity theory indicate is the cause of inflation? 3. What is purchasing ...

1 demonstrate your understanding of the relationship

1. Demonstrate your understanding of the relationship between logistical capabilities and competencies by tracing the evolution of logistical work to universal competencies. Does this logic have any practical application ...

1 types of depository institutions describe and compare the

1. Types of Depository Institutions. Describe and compare the three types of depository institutions. 2. Types of Non depository Institutions. List and describe the four main types of non-depository financial institution ...

1 explain how the publication financial analysis of the

1. Explain how the publication Financial Analysis of the Motor Carrier Industry could be used to determine the percentage of total revenue a firm has in relation to similar trucking firms. 2. Annual reports that insuranc ...

1 a present an argument for why translation exposure is

1 .(a) Present an argument for why translation exposure is relevant to an MNC. (b) Present an argument for why translation exposure is not relevant to an MNC. 2 .Walt Disney Inc built the EuroDisney theme park in France ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen