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NEED ANSWERED ASAP your SUDSCHuon. Sign In fx 0 B D F H J K M N Problem: The Stonewall Corporation is looking into the
NEED ANSWERED ASAP
your SUDSCHuon. Sign In fx 0 B D F H J K M N Problem: The Stonewall Corporation is looking into the purchase of a new forklift that will cost $28,000 plus $2,000 for dealer preparation. The forklift is in the 3-year MACRS category, and the additional annual revenue from this asset will be $ 12,000 for years 1 and 2 and $9,000 for years 3 and 4. With the help of the forklift, expenses for each of the four years is expected to be reduced by $ 9,500.. Stronewall's tax rate is 25% and their weighted average cost of capital is 14%. a) Calculate the net after-tax cash flows from this investment b) Calculate the net present value, with weighted average cost of capital is 14% c) Should they buy the computer system? Total costs to purchase Deduct 1 point for incorrect entry out of 55 MACRS Amt to depreciate Rate Yr 1 Rate Yr 2 Rate Yr 3 Rate Yr 4 Stonewall Corporation After-tax Cash Flows from Proposed Computer System Year Factors 2 3 4 1 Added Revenues 2 Reduced Expenses EBDT 4 Depreciation (using MACRS) Note: Enter depreciation as a minus 5 EBT 6 Taxes (25%) Note: Enter taxes as a minus and round to whole numbers 7 Net Income (after taxes) 8 Add Depreciation a. Net Cash Flow 9 Present Value Interest Factor 10 PV of Annual Cash Flow 11 PV of Cash Inflows 12 PV of Cash Outflows b Net Present Value Should they buy the forklift considering only the present value results?" Use "Y" for yes and "N" for no." Explain your answer Deduct 1 to 4 points out of 55 for poor or wrong answer Sheet1Step by Step Solution
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