You are considering a new project that requires $300,000 investment in a machine, including installation and shipping cost. The life of the machine is three
You are considering a new project that requires $300,000 investment in a machine, including installation and shipping cost. The life of the machine is three years, and it depreciates via 3-year MACRS methods (33.33%, 44.45%, 14.81%, and 7.41%). If you operate this project, the annual sales of the firm increases by $250,000 a year, and the annual operating expense increased by $100,000. The firm has a marginal tax rate of 34%. In order to start the project, the firm has to invest $30,000 in working capital, which will be fully recaptured at the end of the project.. The expected market value of the machine is $50,000 in three years when the project is terminated. What is the terminal cash flow of this project? Round to the nearest penny. Do not include adollar sign in your answer.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get step-by-step solutions from verified subject matter experts
100% Satisfaction Guaranteed-or Get a Refund!
Step: 2Unlock detailed examples and clear explanations to master concepts
Step: 3Unlock to practice, ask and learn with real-world examples
See step-by-step solutions with expert insights and AI powered tools for academic success
-
Access 30 Million+ textbook solutions.
-
Ask unlimited questions from AI Tutors.
-
Order free textbooks.
-
100% Satisfaction Guaranteed-or Get a Refund!
Claim Your Hoodie Now!
Authors: Cheol Eun, Bruce G. Resnick
8th edition
125971778X, 978-1259717789
Study Smart with AI Flashcards
Access a vast library of flashcards, create your own, and experience a game-changing transformation in how you learn and retain knowledge
Explore Flashcards
