Notice: Function _load_textdomain_just_in_time was called incorrectly. Translation loading for the wordpress-seo domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /home/clouawmm/public_html/wp-includes/functions.php on line 6114
Fi515 Week 5 Assignment - Cloud Essays

Cloud Essays

High Quality Essays

Browse Our Directory

Awaiting product image

Fi515 Week 5 Assignment

$5.00

Fi515 Week 5 Assignment

(11-7) New-Project Analysis
You have been asked by the president of your company to evaluate the proposed acquisition of a new spectrometer for the firm’s R&D department. The equipment’s basic price is $70,000, and it would cost another $15,000 to modify it for special use by your firm. The spectrometer, which falls into the MACRS 3-year class, would be sold after 3 years for $30,000. Use of the equipment would require an increase in net working capital (spare parts inventory) of $4,000. The spectrometer would have no effect on revenues, but it is expected to save the firm $25,000 per year in before-tax operating costs, mainly labor. The firm’s marginal federal-plus-state tax rate is 40%.

  1. What is the net cost of the spectrometer? (That is, what is the Year-0 net cash flow?)
  2. What are the net operating cash flows in Years 1, 2, and 3?
  3. What is the additional (non-operating) cash flow in Year 3?
SKU: fi515-week-5-assignment Category:
Share with others

Details

Fi515 Week 5 Assignment

(11-7) New-Project Analysis
You have been asked by the president of your company to evaluate the proposed acquisition of a new spectrometer for the firm’s R&D department. The equipment’s basic price is $70,000, and it would cost another $15,000 to modify it for special use by your firm. The spectrometer, which falls into the MACRS 3-year class, would be sold after 3 years for $30,000. Use of the equipment would require an increase in net working capital (spare parts inventory) of $4,000. The spectrometer would have no effect on revenues, but it is expected to save the firm $25,000 per year in before-tax operating costs, mainly labor. The firm’s marginal federal-plus-state tax rate is 40%.

  1. What is the net cost of the spectrometer? (That is, what is the Year-0 net cash flow?)
  2. What are the net operating cash flows in Years 1, 2, and 3?
  3. What is the additional (non-operating) cash flow in Year 3?

Reviews

There are no reviews yet.

Only logged in customers who have purchased this product may leave a review.

Related products