Ask Question, Ask an Expert


Ask Project Management Expert

Guo Chemical Corporation is thinking the purchase of the chemical analysis machine. Purchase of this machine will result in the increase in earnings before interest and taxes of $70,000 per year. Machine has purchase price of $250,000, and it would cost the extra $10,000 after tax to install this machine properly. Additionally, to operate this machine properly, inventory should be increased by $15,000. This machine has expected life of 10 years, after which it will have no salvage value. Also, suppose simplified straight-line depreciation and that this machine is being depreciated down to zero, a 34% marginal tax rate, and required rate of return of 15 percent.

a. Determine initial outlay related with this project?

b. prepare down the annual after-tax cash flows related with this project, for years 1 through 9?

c. Determine the terminal cash flow in year 10 (Determine the annual after-tax cash flow in year 10 plus any extra cash flow related with termination of project)?

d. Should this machine be bought?


Project Management, Management Studies

  • Category:- Project Management
  • Reference No.:- M933674

Have any Question? 

Related Questions in Project Management

Adding media to a presentationwe certainly live in a

ADDING MEDIA TO A PRESENTATION We certainly live in a "multimedia" society, in which it's often easy to present and receive information using a variety (multi) of media. Presentation tools such as Microsoft's PowerPoint ...

When selling antiques you can usually obtain a higher price

When selling antiques, you can usually obtain a higher price for those that have a provenance, which is information detailing the origin and history of the object. For example, property owned by Jacqueline Kennedy Onassi ...

Individual assignment implementing changeall organisations

Individual Assignment: Implementing Change All organisations will encounter change at some point in their life cycle. This can be a small change, like switching office supply companies or updating software, or it can be ...

Small projectchoose a a simple project like johns move with

Small project: Choose a a simple project like John's move with which you are familiar and establish a time management plan by performing the same tasks as the ones described in section 8.2 and 8.3 Define activities WBS; ...

Review a project schedule and evaluate for potential

Review a Project Schedule and Evaluate for Potential Issues/Cost Impacts In a 1-page Word document, consider the following activities and their durations. The original project schedule, using early activity starts, is sh ...

1 what is a line extension and how does it differ from a

1. What is a line extension, and how does it differ from a product modification? 2. Compare and contrast the three major approaches to modifying a product. 3. Identify and briefly explain the seven major phases of the ne ...

He has heard of eoq as a basis for setting the length of

He has heard of EOQ as a basis for setting the length of production runs. What values should he assign to cp and cH for his operations?

There are many cases where scheduling and inventory models

There are many cases where scheduling and inventory models must be used in communities to ensure they have the resources they need. Staffing emergency respondents is one example where using these models is crucial, both ...

Capstonecapstone project a general outline for is given

Capstone Capstone Project. A general outline for is given below. Develop your Strategic Plan. Reference the Capstone Project. Strategic Plan (5 to 7 pages) 1. What should management do? Implementation • Costs - direct an ...

Assignmentpart 1schedulingfor an organization the following

Assignment: PART 1 Scheduling For an organization, the following project schedule is given. Assume that all times are in days. Task Predecessor Normal Time Crash Time Crash Cost Slope A None 7 7 NA B A 3 3 NA C A 8 4 600 ...

  • 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

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

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