Question
A company is purchasing a new machine for $200,000. Shipping and installation will be $40,000. Changes in net operating working capital inventories, will increase by
A company is purchasing a new machine for $200,000.
Shipping and installation will be $40,000.
Changes in net operating working capital inventories, will increase by $20,000.
The machine will produce 100,000 units/year at $2 per unit. (revenue)
Variable costs are 60% of sales.
The machine has a depreciable class life of 5 years.
The project will last 4 years.
he machine will have a salvage value of $25,000 at the end of year four.
The companys tax rate is 40% and its WACC is 10%.
(3pts)
What is the amount of the depreciable asset? | Select One $56,245 $64,000 $67,200 $260,000 $120,200 $240,000 |
Calculate the Initial Outlay | Select One $56,245 $64,000 $67,200 $260,000 $120,200 $240,000 |
Calculate the cash flow for year One | Select One $56,245 $64,000 $67,200 $260,000 $120,200 $240,000 |
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