the following is the calculation:
| sale value of parts | 409,688 |
| less:book value of parts | 48,715 |
| taxable value | 360,973 |
| less: tax @35% | (126,340.55) |
| after tax value | 234,632.45 |
| add; book value | 48,715 |
| opportunity cost of using the parts | 283,347.45 |
A firm is adding a new blast furnace to its operation. The new furnace will cost...
unanswered A firm is trying to determine the cash flow from selling an old computer system to an interested buyer. The computer system was purchased five years ago for $422,318.00. The system was depreciated using the 7-year MACRS schedule. The firm has an offer this morning for $74,087.00. The tax rate facing the firm is 35.00%. The firm will only accept the offer if it generates a cash flow greater than $63,501.00. not_submitted What is the current book value of...
unanswered A firm is trying to determine the cash flow from selling an old computer system to an interested buyer. The computer system was purchased five years ago for $422,318.00. The system was depreciated using the 7-year MACRS schedule. The firm has an offer this morning for $74,087.00. The tax rate facing the firm is 35.00%. The firm will only accept the offer if it generates a cash flow greater than $63,501.00. not submitted What is the NSV from selling...
Georgia Movie Company has a capital structure with 46.00% debt and 54.00% equity. The cost of debt for the firm is 9.00%, while the cost of equity is 15.00%. The tax rate facing the firm is 40.00% The firm is considering opening a new theater chain in a local college town. The project is expected to cost $12.00 million to initiate in year 0. Georgia Movie expects cash flows in the first year to be $3.02 million, and it also...
A firm is trying to determine the cash flow from selling an old computer system to an interested buyer. The computer system was purchased five years ago for $406,278.00. The system was depreciated using the 7-year MACRS schedule. The firm has an offer this morning for $40,721.00. The tax rate facing the firm is 38.00%. The firm will only accept the offer if it generates a cash flow greater than $56,169.00. What is the current book value of the computer...
Georgia Movie Company has a capital structure with 46.00% debt and 54.00% equity. The cost of debt for the firm is 9.00%, while the cost of equity is 13.00%. The tax rate facing the firm is 37.00%. The firm is considering opening a new theater chain in a local college town. The project is expected to cost $12.00 million to initiate in year 0. Georgia Movie expects cash flows in the first year to be $3.11 million, and it also...
A new furnace for your small factory will cost $41,000 and a year to install, will require ongoing maintenance expenditures of $3,500 a year. But it is far more fuel-efficient than your old furnace and will reduce your consumption of heating oil by 3,800 gallons per year. Heating oil this year will cost $3 a gallon; the price per gallon is expected to increase by $0.50 a year for the next 3 years and then to stabilize for the foreseeable...
A new furnace for your small factory will cost $40,000 and a year to install, will require ongoing maintenance expenditures of $2,800 a year. But it is far more fuel-efficient than your old furnace and will reduce your consumption of heating oil by 3,700 gallons per year. Heating oil this year will cost $3 a gallon; the price per gallon is expected to increase by $0.50 a year for the next 3 years and then to stabilize for the foreseeable...
A new furnace for your small factory will cost $29,000 and a year to install, will require ongoing maintenance expenditures of $1,200 a year. But it is far more fuel-efficient than your old furnace and will reduce your consumption of heating oil by 2,800 gallons per year. Heating oil this year will cost $2 a gallon; the price per gallon is expected to increase by $0.50 a year for the next 3 years and then to stabilize for the foreseeable...
Jamaica Corp. is adding a new assembly line at a cost of $8.5 million. The firm expects the project to generate cash flows of $2 million, $3 million, $4 million, and $5 million over the next four years. Its cost of capital is 16 percent. Net present value: What is the MIRR and should company add the new assembley line? 18.58%, no 18.57%, yes 18%, no 19.87%, no
A new furnace for your small factory will cost $28,000 and a year to install, will require ongoing maintenance expenditures of $1,600 a year. But it is far more fuel-efficient than your old furnace and will reduce your consumption of heating oil by 2,500 gallons per year. Heating oil this year will cost $3 a gallon; the price per gallon is expected to increase by $0.50 a year for the next 3 years and then to stabilize for the foreseeable...