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In: Finance
Use the following information to answer the below. A firm buys machinery for 160,000, pays freight...
Use the following information to answer the below. A firm buys machinery for 160,000, pays freight and installation of 40,000 and buys spare parts and inventory of 27,000. The firm uses a 3 Year ACRS table : Depreciation each year is as follows: 33% 45% 15% and 7 %. The firm expects to sell the machinery in 2 (TWO) years for 87,000. However, while it owns it for the two years, the company expects the machinery to generate revenues or 120,000 each year. Cost for the first year are expected to be 67,000 and for the second year cost will drop to 37,000. The firm is in a 30 % tax bracket.
A. What is the initial investment?
B. What is the depreciable basis?
C.What is the Remaining unused depreciation?
D. What are the Net Operating cash flows for years 1 and years 2?
E. What is the terminal cash flow?
Solutions
Expert Solution
Based on the given data, pls find below steps, workings and answers:
jeff jeffy answered 2 years agoRelated Solutions
Use the following information to answer the below. A firm buys machinery for 160,000, pays freight...
Use the following information to answer the below. A firm buys
machinery for 160,000, pays freight and installation of 40,000 and
buys spare parts and inventory of 27,000. The firm uses a 3 Year
ACRS table : Depreciation each year is as follows: 33% 45% 15% and
7 %. The firm expects to sell the machinery in 2 (TWO) years for
87,000. However, while it owns it for the two years, the company
expects the machinery to generate revenues or...
Use the following information to answer questions 1-15. Consider a firm that daily rents machinery for...
Use the following information to answer questions 1-15.
Consider a firm that daily rents machinery for the cost of $1000
and employs workers at the cost of $100 for a full day of work. The
following table describes the production function of the firm. Fill
the table such that you can make some production decisions for this
firm.
Units of Labor
Units of Production
Fixed Costs
Variable Costs
Total Costs
Average Variable Costs
Average Total Costs
Marginal Cost
1
11.00...
Use the following information to answer questions 1-7 Consider a firm that daily rents machinery for...
Use the following information to answer questions
1-7
Consider a firm that daily rents machinery for the cost
of $1000 and employs workers at the cost of $100 for a full day of
work. The following table describes the production function of the
firm. Fill the table such that you can make some production
decisions for this firm.
Units of Labor
Units of Production
Fixed Costs
Variable Costs
Total Costs
Average Variable Costs
Average Total Costs
Marginal Cost
1
11.00...
Use the following information to answer questions 1-15. Consider a firm that daily rents machinery for...
Use the following information to answer questions 1-15.
Consider a firm that daily rents machinery for the cost of $1000
and employs workers at the cost of $100 for a full day of work. The
following table describes the production function of the firm. Fill
the table such that you can make some production decisions for this
firm.
Units of Labor
Units of Production
Fixed Costs
Variable Costs
Total Costs
Average Variable Costs
Average Total Costs
Marginal Cost
1
11.00...
Use the following information to answer the questions below:
Use the following information to answer the
questions below:
note: all sales are credit sales
Income Stmt info:
2016
2017
Sales
$ 975,000
$ 1,072,500
less Cost of Goods Sold:
325,000
346,125
Gross Profit
650,000
726,375
Operating Expenses
575,000
609,500
Earnings before Interest & Taxes
75,000
116,875
Interest exp
25,000
31,000
earnings before Taxes
50,000
85,875
Taxes
20,000
34,350
Net Income
$ 30,000
$
51,525
Balance Sheet info:
12/31/2016
12/31/2017
Cash
60,000
$ 63,600
Accounts Receivable
80,000
$ 84,000
Inventory...
Answer the questions below using the following information on a firm:
Answer the questions below using the following information on a firm:
Output (Quantity)
Total Cost
0
$50
1
60
2
80
3
110
4
150
5
200
6
260
7
330
8
410
What is average total cost at Q=7?
What is marginal cost at Q =7?
Is this firm operating under increasing or diminishing returns at Q=7? Why?
Say this firm is a perfect competitor. If the market price for its product is $ 60, at what output level...
Use the following information to answer questions [The following information applies to the questions displayed below.]...
Use the following information to answer questions [The following
information applies to the questions displayed below.] The
following information is available for Lock-Tite Company, which
produces special-order security products and uses a job order
costing system. April 30 May 31 Inventories Raw materials $ 48,000
$ 48,000 Work in process 9,900 19,700 Finished goods 67,000 33,700
Activities and information for May Raw materials purchases (paid
with cash) 194,000 Factory payroll (paid with cash) 150,000 Factory
overhead Indirect materials 14,000 Indirect...
Use the following information to answer questions [The following information applies to the questions displayed below.]...
Use the following information to answer questions
[The following information applies to the questions
displayed below.]
The following information is available for Lock-Tite Company, which
produces special-order security products and uses a job order
costing system.
April 30
May 31
Inventories
Raw materials
$
44,000
$
54,000
Work in process
9,500
18,800
Finished goods
59,000
34,000
Activities and information for May
Raw materials purchases (paid with cash)
185,000
Factory payroll (paid with cash)
250,000
Factory overhead
Indirect materials
10,000
Indirect...
Use the following information to answer question 4 to 6: Amazon buys a Mexico Peso put...
Use the following information to answer question 4 to
6:
Amazon buys a Mexico Peso put option (contract size: 500,000
Peso) at a premium of $0.0082/Peso. The exercise price is
$0.054/Peso:
4.If the spot at expiration is $0.062/Peso, what is the Amazon’s
profit?
a. $4,100 loss
b. $100 loss
c. $4,000 loss
d. $8,100 loss
5.If the spot at expiration is $0.050/Peso, what is the Amazon’s
profit?
a. $2,000 loss
b. $4,100 loss
c. $2,100 loss
d. $6,100 loss
6.If...
Use the following information to answer the questions below. NUT &nbs
Use the following information to answer the questions below.
NUT
250
Exports
500
Net increase in foreign ownership of U.S.based nonreserve
assets
400
Net increase in U.S. government’s foreign
assets
30
Net increase in U.S. private
assets
250
Investment income received in the
U.S.
200
Net increase in U.S. ownership of official reserve
assets
20
Imports
600
Net increase in foreign ownership of U.S. reserve
assets
100
Investment income paid abroad by the
U.S.
300
What is the current account...
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