Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Required information Use the following to answer the next three questions: The Wall, Co. Is considering the purchase of some new machinery. The new machinery

image text in transcribed
image text in transcribed
Required information Use the following to answer the next three questions: The Wall, Co. Is considering the purchase of some new machinery. The new machinery costs $70,000. The machinery falls into the MACRS three-year class, and it will be sold after three years for $8,000. The depreclation percentages each year are Year 1=33%, Year 2=45%, Year 315%, Year 4=7%. The machinery will require The Wall to increase its working capltal by $4,100 which will be recovered at the end of the machinery's life. The machinery has a three year life and will increase The Walls revenues by $150,000 and costs by $25,000 for each year of the project's three year life. The Wall has a 10% cost of capital and has a 20% tax rate. What is the total cash flow in year 3 of the project? Muitiple Choice $113580 $1021000 $105,580 $109480

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

Fundamentals Of Corporate Finance

Authors: Richard A. Brealey, Marcus, Alan J, Myers, Stewart C.

2nd Edition

0070074860, 9780070074866

More Books

Students also viewed these Finance questions

Question

Calculate the cost per hire for each recruitment source.

Answered: 1 week ago

Question

What might be some advantages of using mobile recruiting?

Answered: 1 week ago

Question

What external methods of recruitment are available?

Answered: 1 week ago