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Gentry Machines, Inc. has just received a special job order from one of its clients. i Click the icon to view the financial data. Click
Gentry Machines, Inc. has just received a special job order from one of its clients. i Click the icon to view the financial data. Click the icon to view the MACRS depreciation schedules. Click the icon to view the interest factors for discrete compounding when i= 16% per year. (a) Compute the after-tax cash flows in actual dollars. Fill in the table below. (Round to the nearest dollar.) Year Net After-Tax Cash Flow 0 $ 1 $ $ (b) What is the equivalent present value of this amount at time 0? More Info The equivalent present value of this amount at time 0 is $ - (Roun The following financial data have been collected: This two-year project requires the purchase of special-purpose equipment for $52,000. The equipment falls into the MACRS five-year class, The machine will be sold for $26,000 (today's dollars) at the end of two years. The project will bring in additional annual revenue of $110,000 (actual dollars), but it is expected to incur an additional annual operating cost of $53,700 (today's dollars). The project requires an investment working capital in the amount of $10,000 at n = 0. In each subsequent year, additional working capital needs to be provided at the general inflation rate. Any investment in working capital will be recovered after the project is terminated. To purchase the equipment, the firm expects to borrow $42,000 at 12% over two-year period. The remaining $10,000 will be taken from the firm's retained earnings. The firm will make equal annual payments of $24,851 (actual dollars) to pay off the loan. . The firm expects a general inflation of 5% per year during the project period. The firm's marginal tax rate is 25%, and its market interest rate is 16%
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