Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

problem: Fabulous Fashions is thinking to purchase of computerized clothes designing software. The software is expected to cost dollar 160,000, have a useful life of five (5) years, and have zero salvage value at the end of its useful life. Suppose tax regulations permit the depreciation patterns for this asset:

Year

Percent Deductible

1

20

2

32

3

19

4

15

5

14

The company's tax rate is 30% & its cost of capital is 8%. The software is expected to generate cash savings and cash expenses:

Year

Cash Savings

Cash Expenses

1

$61,000

$9,000

2

67,000

8,000

3

72,000

13,000

4

60,000

9,000

5

48,000

5,000

[A] Make a time line presenting the after-tax operating cash flows
[B] Determine the following on an after-tax basis; payback period, net present value, profitability index and internal rate of return.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M921358

Have any Question? 


Related Questions in Basic Finance

How can we break down the valuation of a deferred annuity

How can we break down the valuation of a deferred annuity into manageable parts for computation purposes? Which has the highest present value if the payments and number of payments are identical, an ordinary annuity or a ...

1 what are the responsibilities and typical payoff for a

1. What are the responsibilities and typical payoff for a general partner in a venture capital limited partnership? 2. Distinguish between positive covenants and negative covenants in venture capital investment contracts ...

1 what kinds of organizations must consider disaster

1. What kinds of organizations must consider disaster preparedness? 2. What is the difference between mitigation and preparedness? 3. What are the steps involved in the preparedness cycle? 4. Name the ways that the Natio ...

A company tests all new brands of golf balls to ensure that

A company tests all new brands of golf balls to ensure that they meet certain specifications. One test conducted is intended to measure the average distance traveled when the ball is hit by a machine. Suppose the company ...

1 compare and contrast the transport principles of economy

1. Compare and contrast the transport principles of economy of scale and economy of distance. Illustrate how they combine to create efficient transportation. 2. Describe the five modes of transportation, identifying the ...

1 discuss how any company can become an mnc what are some

1. Discuss how any company can become an MNC. What are some of the options available to companies that allow them to use international markets and locations competitively? 2. Discuss some reasons why reductions in world ...

A small firm makes three similar products which all follow

A small firm makes three similar products, which all follow the same three-step process, consist- ing of milling, inspection, and drilling. Product A requires 12 minutes of milling, 5 minutes for inspection, and 10 minut ...

1 distinguish among observational physiological and

1. Distinguish among observational, physiological, and self-report measures. 2. What do researchers interested in psychometrics study? 3. Why do researchers use converging operations? 4. Distinguish among nominal, ordina ...

Use the value of the linear correlation coefficient to

Use the value of the linear correlation coefficient to calculate the coefficient of determination. What does this tell you about the explained variation of the data about the regression line? About the unexplained variat ...

If the calculated value of f is found to be significant for

If the calculated value of F is found to be significant for the main effect of an independent variable with more than two levels, what tests does the researcher then conduct? Why are such tests not necessary if the indep ...

  • 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