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need help fast!! (Estimated time allowance: 5 minutes) Flowers Inc. purchases an asset for $190,000 and will depreciate it down to zero using the straigth-line
need help fast!!
(Estimated time allowance: 5 minutes) Flowers Inc. purchases an asset for $190,000 and will depreciate it down to zero using the straigth-line method. The life of the asset is 20 years. Flowers Inc. has a tax rate of 40%. If the asset is sold at the end of six years for $50,000, what is the cash flow from disposal (termination value of the asset)? Your Answer: Answer (Estimated time allowance: 3 minutes) Your company is considering launching a new line of stoves. The manufacturing plant required for producing the new line of stoves costs $20,000,000 (today) and will be depreciated down to zero over 20 years using straight-line depreciation. The manufacturing plant will be sold for $6,000,000 at the end of 10 years (the life of the project is 10 years). Net working capital increases by $3,000,000 at the beginning of the project (year 0) and it is reduced back to its original level in the final year of the project. The tax rate is 20 percent and the discounting rate for the project is 10%. What is the initial outlay (Cash flow today for this project? ** If this is a cash outflow, enter the negative sign in front of the first digit of your answer; if this is a cash inflow, do not enter a sign, simply enter the number. Do not use the S sign. Use commas to separate thousands. Round to two nearest dollar. For example if you obtain $1,432.728 then enter 1,434 or if you obtain $1,120.1321 then enter 1,120 Your Step by Step Solution
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