Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. company sz is considering the purchase of a new ma

Company SZ is considering the purchase of a new machine today. The machine costs $8000...

70.2K

Verified Solution

Question

Finance

image
Company SZ is considering the purchase of a new machine today. The machine costs $8000 plus 52000 for shipping and installation and falls under the 5-year MACRS set clan. If the company takes this project of asset expansion, revenues will increase by $1000 and operating costs will increase by $500 for each of the next 6 years compared to the case of no expansion. When the project ends in the sixth year, the machine will be sold for S1000. If the project is taken, net working capital will use by 5500 at the time of purchase and will be reversed at the time of sale. The corporate income tax rate is 30% and the tax rate on capital gain is 20% Year 1 2 3 4 MACRS Schedule 3-Year Class 3. Year Class 33.33% 20.00% 32.00 14.81% 19.2008 741% 11.52 11529 5.76% 7.Year Class 14.1946 24.49% 17.49% 12.49% 8.9396 8 929 8.935 4.4696 S 6 7 8 Compute the incremental cashflow associated with the asset expansion project in Your 6 relative to taking no action

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Profit Parabolas: The baseball card shop is trying to sell limited baseball cards for $30, yet...

Basic Math
Q

Consider how being part of a crowd or group changes your behavior. How can deindividuation change...

Psychology
Q

Consider a 400mm long beam with a pinned left and simple roller right supports at...

Basic Math
Q

1 0 sin 30 sin 45 0 1 sin 60 a x 0 1 P...

Basic Math
Q

Consider the random experiment where the numbers 1-35 are written on separate tickets and placed...

Algebra
Q

Question 3 of 60 Simplify the following expression O O de o seld Ned Reset

Algebra
Q

Required information Use the following information for Exercises 19-20 below. (Algo) [The following information applies...

Accounting
Q

2. Define Timeliness, Define Faithful representation, and Explain the relationship between Timeliness and Faithful representation...

Accounting
Q

The Alpha industrial bonds pay an annual interest payment equal to 5.875 percent of: (Use...

Accounting
Q

A Moving to the next question prevents changes to this answer. te Question 11 Which...

Accounting
Q

An employee of Glide the World is burned by spilling airplane fuel while fueling a...

Accounting
Q

On July 1, an investor holds 50,000 shares of a certain stock. The market price...

Finance