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Could the tutors help me to do this homework please? It's cost accounting class. 1. Square Manufacturing is considering investing in a robotics manufacturing line.
Could the tutors help me to do this homework please? It's cost accounting class. 1. Square Manufacturing is considering investing in a robotics manufacturing line. Installation of the line will cost an estimated $10.0 million. This amount must be paid immediately even though construction will take three years to complete (years 0, 1, and 2). Year 3 will be spent testing the production line and, hence, it will not yield any positive cash flows. If the operation is very successful, the company can expect after-tax cash savings of $7.0 million per year in each of years 4 through 7. After reviewing the use of these systems with the management of other companies, Square's controller has concluded that the operation will most probably result in annual savings of $5.2 million per year for each of years 4 through 7. However, it is entirely possible that the savings could be as low as $2.8 million per year for each of years 4 through 7. The company uses a 14 percent discount rate. Required: Compute the NPV under the three scenarios. (Negative amount should be indicated by a minus sign. Round present value factor for each year to three decimal places. Do not round other intermediate computations and round your final answer to the nearest dollar amount. Enter your answers in thousands of dollars and not in millions of dollars.) Best Case Expected Wore case NPV 2. Rush Corporation plans to acquire production equipment for $612,500 that will be depreciated for tax purposes as follows: year 1, $122,500; year 2, $212,500; and in each of years 3 through 5, $92,500 per year. An 14 percent discount rate is appropriate for this asset, and the company's tax rate is 40 percent. Required: (a) Compute the present value of the tax shield resulting from depreciation. (Round present value factor for each year to three decimal places and other computations to nearest whole dollar value.) present value of the tax shield= - Compute the present value of the tax shield from depreciation assuming straight-line depreciation ($122,500 per year). (Round present value factor for each year to three decimal places and other computations to nearest whole dollar value.) present value of the tax shield= 3. Star City is considering an investment in the community center that is flows: Year 1 2 3 4 5 Net Cash Flow $ 39,000 69,000 99,000 99,000 119,000 This schedule includes all cash inflows from the project, which will also outlay. The city is tax-exempt; therefore, taxes need not be considered. Required: (a) What is the net present value of the project if the appropriate discount rate factor for each year to three decimal places. Negative amount should net present value of the project= (b) What is the net present value of the project if the appropriate discount rate factor for each year to three decimal places. Negative amount should net present value= 4. The Johnson Research Organization, a nonprofit organization that does laboratory equipment with an estimated life of 7 years so it will not have to types of work. The following are all of the cash flows affected by the decision Investment (outflow at time 0) Periodic operating cash flows: Annual cash savings because outside laboratories are not used Additional cash outflow for people and supplies to operate the equipment Salvage value after seven years, which is the estimated life of this project Discount rate Required: Calculate the net present value of this decision. Should the organization buy factors to three decimal places. Negative amount should be indicated by a net present value= Should the organization buy the equipment? Yes?, No? 3
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