Fox Central Co. is a manufacturing company which is considering the purchase of a new...
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Accounting
Fox Central Co. is a manufacturing company which is considering the purchase of a new equipment. The below given summarizes all the information related to the equipment: -Equipments price: $180,000 -Shipping: $20,000 -Payment to find a good place to install the equipment: $30,000 -Useful Life : 4 years -Depreciation Method: MACRS 3 year class -Total Revenues/ year: $100,000 -Operating costs (Excluding Depreciation)/year: $25,000 -Salvage Value: $10,000 -Increase in Current Asset: $23,000 -Increase in Current liabilities (Except N/P): $8,000 -WACC: 9% -Tax rate: 40% Note: The MACRS rates are 33%, 45%, 15%, and 7% respectively.
. The after-tax Cash Flow for the 1st year is: *
5 points
A. $65,000
B. $71,400
C. $111,000
D. $75,360
E. None of the above
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