Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

in a time crunch!!! plz answer both!! :) Question 6 (1 point) The Target Copy Company is contemplating the replacement of its old printing machine

in a time crunch!!! plz answer both!! :) image text in transcribed
Question 6 (1 point) The Target Copy Company is contemplating the replacement of its old printing machine with a new model costing $ 60,000. The old machine, which originally cost $40,000, has 6 years of expected life remaining and a current book value of $ 24 ,000 versus a current market value of $ 27,000. Target's corporate tax rate is 40 percent. If Target sells the old machine at market value, what is the initial after-tax outlay for the new printing machine? Cash outflow must be a negative number! Round it a whole dollar and do not include the $ sign. Your Answer: Answer Question 7 (1 point) The president of Real Time Inc. has asked you to evaluate the proposed acquisition of a new computer. The computer's price is $ 30,000, and it falls into the MACRS 3- year class. Purchase of the computer would require an increase in net operating working capital of $6,000. The computer would increase the firm's before-tax revenues by $30,000 per year but would also increase operating costs by $ 19,000 per year. The computer is expected to be used for 3 years and then be sold for $25,000. The firm's marginal tax rate is 40 percent, and the project's cost of capital is 14 percent. What is the net cash flow at t = 0? Cash outflow should be in negative number, e.g., -33,000, and do not include the $ sign. Your

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Planning & Analysis And Performance Management

Authors: Jack Alexander

1st Edition

1119491487, 9781119491484

More Books

Students also viewed these Finance questions