Question
1.Three years ago, Knox Glass purchased a machine for a 3-year project. The machine cost 820,000 and is being depreciated using MACRS 3 year class
1.Three years ago, Knox Glass purchased a machine for a 3-year project. The machine cost 820,000 and is being depreciated using MACRS 3 year class (use table in previous question)Today, the project ended and the machine was sold for 45,000. What is the aftertax salvage value of that machine if Knox Glass is in the 40% tax rate?
2.Three years ago, Green Glass purchased a machine for a 3-year project. The machine cost 868,000 and is being depreciated using MACRS 3 year class (use table in previous question)Today, the project ended and the machine was sold for 90,000. What is the aftertax salvage value of that machine if Green Glass is in the 40% tax rate?
3.Marie's Fashions is considering a project that will require $41,000 in net working capital and $87,000 in fixed assets--the assets are in the 3 year MACRS Class. The project is expected to produce annual operating cash flows of $75,000 after tax per year for 6 years. The tax rate is 30 percent. What is the total cash flow in year 6 for this project if the fixed asset that was initially purchased is worthless at the end of 6 years?
4.Marie's Fashions is considering a project that will cost $19,000 in fixed assets today. The project is expected to produce annual operating cash flows of $15,000 after-tax, per year for 4 years. What is the NPV for this project if the fixed asset that was initially purchased is sold for $4,000 at the end of 4 years if the cost of capital is 10% and the relevant tax rate is 30%?
5.You are working on a bid to build two apartment buildings a year for the next 5 years for a local college. This project requires the purchase of $750,000 of equipment that will be depreciated using 5 year MACRS. The equipment can be sold at the end of the project for $325,000. You will also need $143,000 in net working capital over the life of the project. The fixed costs will be $628,000 a year and the variable costs will be $1,298,000 per building. What is your cash flow in time 0 for this investment?
6.
Falling Builders hired consultants last year, paying them $125,000 for a feasibility study. Based on the results of that study they are now investing in A 4-year project has an initial fixed asset investment of $306,600, and initial net working capital investment of $31,200. What is the Total Cash flow at time 0 for this project?
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