(Answered) The chung chemical corporation is considering the purchase

Engineering

The Chung Chemical Corporation is considering the purchase of a chemical analysis machine. Although the machine being considered will result in an increase in earnings before interest and taxes of $40,000 per year, it has a purchase price of $140,000, and it would cost an additional $5,000 to properly install the machine. In addition, to properly operate the machine, inventory must be increased by $7,000. This machine has an expected life of 10 years, after which it will have no salvage value. Also, assume simplified straight-line depreciation and that this machine is being depreciated down to zero, a 31% marginal tax rate, and a required rate of return of 13%.

a. What are the annual after-tax cash flows associated with this project for years 1 through 9?

b. What is the terminal cash flow in year 10 (what is the annual after-tax cash flow in year 10 plus any additional cash flows associated with the termination of the project)?

c. Should this machine be purchased?

View complete question

Computer Engineering, Engineering

Category:- Computer Engineering
Reference No.:- M91962151
Price:- $15

Verified Expert

Priced at $30 Now at $15, Verified Solution

Have any Question?Write your Review or question?

Related Questions in Computer Engineering

Question suppose host a has 10 packets with sequence

Question : Suppose host A has 10 packets with sequence numbers 1 to 10 to be transmitted to host B. Now imagine that the packets numbered 2 and 7 are lost when they were sent the first time. Assume that ACKs are never lo ...

Tablet recommendationpreparation imagine the following

Tablet Recommendation: Preparation Imagine the following scenario: A hospital has hired you as a consultant to recommend a tablet for their employees to use, with these parameters: The hospital provides wifi access to th ...

Anz is offering a product that pays out 3000 quarterly from

ANZ is offering a product that pays out $3,000 quarterly from the end of Mar 2021 to the end of Dec 2030 with annual interest rate 6% compounded quarterly. (e.g. payment is made at the end of every March, June, September ...

1 what do we mean by financial intelligence how to assess a

1. What do we mean by financial intelligence? How to assess a company's health? 2. Use the plain language to define operating experience, capital expenditure, accruals, depreciation, and goodwill. 3. Describe differences ...

Search the internet for 5 open source reporting software

Search the internet for 5 open source reporting software packages of your choice? Explain why you think these software packages are the best for BI/DSS Reporting? Choose one of them and do associated with the reporting s ...

For the following c statement what is the corresponding

For the following C statement, what is the corresponding RISC-V assembly code? Assume that the variables f, g, h, and i are given and could be considered integers as declared in a C program. Use a minimal number of assem ...

Suppose that we need to send four packets a b c d from a

Suppose that we need to send four packets (A, B, C, D) from a sender to a receiver. Consider two cases. 1) packet B is lost. 2) acknowledgement for packet B is lost. When there is a packet loss, always assume that only t ...

Wat type of malware do you think is the most destructive

What type of malware do you think is the most destructive : viruses, worms, trojan programs, spyware or adware.

Suppose that we have the following cities mudville horns

Suppose that we have the following cities: Mudville, Horns, Farm Town, Almira, Billows, Carmenovsk, Dantub. They are in a rural county and have no paved roads. Your county government decides to build a paved network of r ...

A sequence of natural numbers a1 a2 an is said to be a

A sequence of natural numbers (a 1 , a 2 , ..., a n ) is said to be a degree sequence if there exists an undirected graph on n vertices {v 1 , v 2 , ..., v n } such that the degree of v i is a i for each i = 1, 2, ..., ...

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

Recent Questions

Ask Computer Engineering Expert