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 schedule. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Expert Solution

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

jeff jeffy answered 1 year ago

A proposed cost-saving device has an installed cost of $800,000. The device will be used in...

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...

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 $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 $78,500. What is the depreciation each year of the project? What is the aftertax salvage...

A proposed cost-saving device has an installed cost of $695,000. The device will be used in...

A proposed cost-saving device has an installed cost of $695,000. 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 $105,000, the marginal tax rate is 25 percent, and the project discount rate is 11 percent. The device has an estimated Year 5 salvage value of $80,000. What level of pretax cost savings do we require for this project to be profitable? MACRS...

Question