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fin 500 homework week 10

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Question;Problem 1;Suppose;new instruments for a firm cost $18,000 with an additional installation fee of;$2,000, both of which are depreciable. Complete the depreciation schedule shown;below using the Modified Accelerated Cost Recovery System (MACRS) 3-year class.;Year;Rate;Basis;Depreciation;1;2;3;4;Problem 2;A;company is evaluating a proposed 4-year project. The depreciable cost will include the;following: $300,000 for the equipment, $20,000 for shipping, and $30,000 for;installation. The depreciation life is under the MACRS 3-year class, with a;salvage value of $45,000. The inventories will rise by $18,000 and accounts;payable will rise by $3,000. In addition, the new sales are estimated to be;150,000 units per year at $2.25 per unit. There is a variable operating cost;that is 60% of sales and the company?s marginal tax rate is 35%. Determine the net operating cash flow for the;initial year (Year 0).;Problem 3;A;company is evaluating a proposed 4-year project. The depreciable cost will include the;following: $300,000 for the equipment, $20,000 for shipping, and $30,000 for;installation. The depreciation life is under the MACRS 3-year class, with a;salvage value of $45,000. The inventories will rise by $18,000 and accounts;payable will rise by $3,000. In addition, the new sales are estimated to be;150,000 units per year at $2.25 per unit. There is a variable operating cost;that is 60% of sales and the company?s marginal tax rate is 35%. Determine the net operating cash flow for;Years 1, 2, and 3.;Problem 4;The;net cash flows for any year during the life of capital expenditure project are;equal to the change in ____ plus the change in ____.;a.;earnings;before interest and taxes, depreciation;b.;earnings;before taxes, depreciation;c.;earnings;after taxes, depreciation;d.;revenues;costs;Problem 5;Depreciation;is based on the asset cost plus all of the following except;a. shipping costs;b. increase in inventory;c. installation;d. cost of attached equipment acquired;at the same time

 

Paper#44688 | Written in 18-Jul-2015

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