1. The president of Real Time Inc. has asked you to evaluate the proposed acquisition of a new computer. The computer's price is $70,000, and it falls into the MACRS 3-year class. Purchase of the computer would require an increase in net operating working capital of $7,000. The computer would increase the firm's before-tax revenues by $30,000 per year but would also increase operating costs by $14,000 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 innegative number, e.g., -33,000, and do not include the $ sign.

2.The president of Real Time Inc. has asked you to evaluate the proposed acquisition of a new machine. The machine's price is $50,000, and it falls into the MACRS 3-year class. Purchase of the machine would require an increase in net operating working capital of $2,000. 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 machine is expected to be used for 3 years and then be sold for $12,000. The firm's marginal tax rate is 40 percent, and the project's cost of capital is 14 percent.

What is the operating cash flow inYear 2? Round it to a whole dollar, and do not include the $ sign.

YEAR.............MACRS PERCENT

1.............0.33

2.............0.45

3.............0.15

4.............0.07

3. The Home Store Company is contemplating the replacement of its old printing machine with a new model costing $ 8 0,000. 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.

4. The president of Real Time Inc. has asked you to evaluate the proposed acquisition of a new machine. The machine's price is $50,000, and it falls into the MACRS 3-year class. Purchase of the machine would require an increase in net operating working capital of $3,000. The machine would increase the firm's before-tax revenues by $20,000 per year but would also increase operating costs by $11,000 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 total value of the terminal yearnon-operatingcash flows at the end of Year 3? Round it to a whole dollar, and do not include the $ sign.

YEAR.............MACRS PERCENT

1.............0.33

2.............0.45

3.............0.15

4.............0.07

5. The president of Real Time Inc. has asked you to evaluate the proposed acquisition of a new computer. The computer's price is $70,000, and it falls into the MACRS 3-year class. Purchase of the computer would require an increase in net operating working capital of $7,000. The computer would increase the firm's before-tax revenues by $30,000 per year but would also increase operating costs by $14,000 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 innegative number, e.g., -33,000, and do not include the $ sign.