Question
In: Finance
A proposed cost-saving device has an installed cost of $800,000. The device will be used in...
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A proposed cost-saving device has an installed cost of $800,000.
The device will be used in a five-year project but is classified as
three-year MACRS property for tax purposes. The required initial
net working capital investment is $81,000, the marginal tax rate is
23 percent, and the project discount rate is 8 percent. The device
has an estimated Year 5 salvage value of $124,000. What level of
pretax cost savings do we require for this project to be
profitable? MACRS schedule (Do not round intermediate
calculations and round your answer to 2 decimal places, e.g.,
32.16.)
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Solutions
jeff jeffy answered 1 year agoRelated Solutions
A proposed cost-saving device has an installed cost of $815,000. The device will be used in...
A proposed cost-saving device has an installed cost of $815,000.
The device will be used in a five-year project but is classified as
three-year MACRS property for tax purposes. The required initial
net working capital investment is $87,000, the marginal tax rate is
21 percent, and the project discount rate is 11 percent. The device
has an estimated Year 5 salvage value of $133,000. What level of
pretax cost savings do we require for this project to be
profitable?
What...
A proposed cost-saving device has an installed cost of $705,000. The device will be used in...
A proposed cost-saving device has an installed cost of $705,000.
The device will be used in a five-year project but is classified as
three-year MACRS property for tax purposes. The required initial
net working capital investment is $115,000, the marginal tax rate
is 22 percent, and the project discount rate is 13 percent. The
device has an estimated Year 5 salvage value of $86,000. What level
of pretax cost savings do we require for this project to be
profitable? MACRS...
A proposed cost-saving device has an installed cost of $725,000. The device will be used in...
A proposed cost-saving device has an installed cost of $725,000.
The device will be used in a five-year project but is classified as
three-year MACRS property for tax purposes. The required initial
net working capital investment is $135,000, the marginal tax rate
is 21 percent, and the project discount rate is 13 percent. The
device has an estimated Year 5 salvage value of $98,000. What level
of pretax cost savings do we require for this project to be
profitable? MACRS...
A proposed cost-saving device has an installed cost of $585,000. The device will be used in...
A proposed cost-saving device has an installed cost of $585,000.
The device will be used in a five-year project but is classified as
three-year MACRS (MACRS Table) property for tax purposes. The
required initial net working capital investment is $45,000, the
marginal tax rate is 35 percent, and the project discount rate is
12 percent. The device has an estimated Year 5 salvage value of
$65000.
Required:
What level of pretax cost savings do we require for this project...
A proposed cost-saving device has an installed cost of $820,000. The device will be used in...
A proposed cost-saving device has an installed cost of $820,000.
The device will be used in a five-year project but is classified as
three-year MACRS property for tax purposes. The required initial
net working capital investment is $89,000, the marginal tax rate is
22 percent, and the project discount rate is 8 percent. The device
has an estimated Year 5 salvage value of $136,000. What level of
pretax cost savings do we require for this project to be
profitable? MACRS...
a proposed cost-saving device has an installed cost of 725000. The device will be used in...
a proposed cost-saving device has an installed cost of
725000. The device will be used in a five-year project but is
classified as three-year MACRS property for tax purposes. The
required initial net working capital investment is 135000, the
marginal tax rate is 21 percent, and the,project discount rate is
13 percent. The,device has an estimated Year 5 salvage value of
98000. what level of pretax cost saving do,we require for this
project to be profitable?
yr
3
yr
5...
A proposed cost- saving device has an installed cost of $735,000. The device will be used...
A proposed cost- saving device has an installed cost
of $735,000. The device will be used in a five year project but is
classified as a three year MACR property for tax purposes. The
required initial net working capital investment is $55,000, the tax
rate is 22 percent and the project discount rate is 9 percent. The
device has an estimated Year 5 salvage value of $85,000. What level
of pretax cost savings do we require for this project to...
A proposed cost-saving device has an installed cost of $790,000. The device will be used in...
A proposed cost-saving device has an installed cost of $790,000.
The device will be used in a five-year project but is classified as
three-year MACRS property for tax purposes. The required initial
net working capital investment is $77,000, the marginal tax rate is
21 percent, and the project discount rate is 10 percent. The device
has an estimated Year 5 salvage value of $118,000. What level of
pretax cost savings do we require for this project to be
profitable? MACRS...
A proposed cost-saving device has an installed cost of $664,000. The device will be used in...
A proposed cost-saving device has an installed cost of $664,000.
The device will be used in a five-year project but is classified as
three-year MACRS (MACRS Table) property for tax purposes. The
required initial net working capital investment is $53,500, the
marginal tax rate is 34 percent, and the project discount rate is
13 percent. The device has an estimated Year 5 salvage value of
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What is the depreciation each year of the project?
What is the aftertax salvage...
A proposed cost saving investment has a five year life and an installed cost of $800,000....
A proposed cost saving investment has a five year life and an
installed cost of $800,000. The depreciation schedule for the
equipment is three year MACRS for which the annual factors are
.333, .4445, .1481, .0741. The equipment has an estimated salvage
value in year 5 of $65,000 before taxes. The company's required
return on cost saving investments is 12% and its tax rate of 35%.
The company expects to borrow the funds neccesary to make the
investment and pay...
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