Question

In: Finance

The Wet Corp. has an investment project that will reduce expenses by $30,000 per year for...

The Wet Corp. has an investment project that will reduce expenses by $30,000 per year for 3 years. The project's cost is $35,000. If the asset is part of the 3-year MACRS category (33.33% first year depreciation) and the company's tax rate is 33%, what is the cash flow from the project in year 1? (Do not round intermediate calculations. Round your answer to the nearest dollar amount.) $23,950 $23,400 $24,730 $25,410

Solutions

Expert Solution

jeff jeffy answered 3 months ago
Next > < Previous

Related Solutions

The Wet Corp. has an investment project that will reduce expenses by $20,000 per year for...
The Wet Corp. has an investment project that will reduce expenses by $20,000 per year for 3 years. The project's cost is $20,000. If the asset is part of the 3-year MACRS category (33.33% first year depreciation) and the company's tax rate is 36%, what is the cash flow from the project in year 1?
Consider a capital expenditure project that has forecasted revenues equal to $80,000 per year; cash expenses...
Consider a capital expenditure project that has forecasted revenues equal to $80,000 per year; cash expenses are estimated to be $25,000 per year. The cost of the project equipment is $120,000, and the equipment’s estimated salvage value at the end of the project is $10,000. The equipment’s $120,000 cost will be depreciated on a straight-line basis to $0 over an 8-year estimated economic life. Assume that the project requires an initial $10,000 working capital investment. The company can recover this...
Consider a capital expenditure project that has forecasted revenues equal to $80,000 per year; cash expenses...
Consider a capital expenditure project that has forecasted revenues equal to $80,000 per year; cash expenses are estimated to be $25,000 per year. The cost of the project equipment is $120,000, and the equipment’s estimated salvage value at the end of the project is $10,000. The equipment’s $120,000 cost will be depreciated on a straight-line basis to $0 over an 8-year estimated economic life. Assume that the project requires an initial $10,000 working capital investment. The company can recover this...
A company is considering a project that will reduce annual operating expenses by $200,000, before income...
A company is considering a project that will reduce annual operating expenses by $200,000, before income taxes each year for the next five years. The project requires an investment in equipment that costs $1,000,000 and will be depreciated using straight line depreciation over its 5-year life. At the end of the project life, the equipment is expected to be sold for $500,000. The equipment uses a different material and inventory will initially rise by $100,000 and the inventory can be...
An investment pays $20,000 at the end of year 2, $30,000 at the end of year...
An investment pays $20,000 at the end of year 2, $30,000 at the end of year 4 and $X at the end of year 8. At an annual effective rate of 8.5%, the modified duration of this cash flow is 5.51704. Calculate X (round your answer to integer). Ans should be one of these: Numerical answers (in random order) 6.955, 0.062, 4.5228, 6538.49, 0.04317, 2660.67, 50000, 400.36, 202.1, 3671.29, 1951.62, 4.4621. please show all work and do not use excel...
An investment pays $20,000 at the end of year 2, $30,000 at the end of year...
An investment pays $20,000 at the end of year 2, $30,000 at the end of year 4 and $X at the end of year 8. At an annual effective rate of 8.5%, the modified duration of this cash flow is 5.51704. Calculate X (round your answer to integer). Show all works, and please show ur work it with math steps and illustrations instead of excel tables!! Thank you! I will thumb up if it's correct!
Maxwell Software, Inc., has the following mutually exclusive projects. Year Project A Project B   0 –$30,000...
Maxwell Software, Inc., has the following mutually exclusive projects. Year Project A Project B   0 –$30,000    –$33,000      1 17,000    18,000      2 13,500    12,000      3 3,900    13,500    a-1. Calculate the payback period for each project. (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) Payback period   Project A years     Project B years a-2. Which, if either, of these projects should be chosen? Project A Project B Both...
5) Project L costs $30,000, its expected cash inflows are $8,000 per year for 8 years,...
5) Project L costs $30,000, its expected cash inflows are $8,000 per year for 8 years, and its WACC is 10%. What is the project's discounted payback? Do not round intermediate calculations. Round your answer to two decimal places.   years
A company is considering a 6-year project that requires an initial outlay of $30,000. The project...
A company is considering a 6-year project that requires an initial outlay of $30,000. The project engineer has estimated that the operating cash flows will be $3,000 in year 1, $6,000 in year 2, $7,000 in year 3, $7,000 in year 4, $7,000 in year 5, and $8,000 in year 6. At the end of the project, the equipment will be fully depreciated, classified as 5-year property under MACRS. The project engineer believes the equipment can be sold for $6,000...
Year Project(A) Project (B) 0 -$30,000 -$30,000 1 13,000 5,000 2 11,000 5,000 3 9,000 5,000...
Year Project(A) Project (B) 0 -$30,000 -$30,000 1 13,000 5,000 2 11,000 5,000 3 9,000 5,000 4 7,000 5,000 5 0 5,000 6 7 8 9 10 0 0 0 0 0 5,000 5,000 5,000 5,000 5,000 The required rate of return is 10%. 3). What is the payback period for each of the projects? Which project should be accepted if the payback period method is applied? Assume that the target payback period is 4 years. Explain why. (4). What...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT