Martinez, Incorporated, has purchased a brand new machine to produce its High Flight line of shoes. The machine has an economic life of 6 years. The depreciation schedule for the machine is straight-line with no salvage value. The machine costs $612,000. The sales price per pair of shoes is $90, while the variable cost is $39. Fixed costs of $310,000 per year are attributed to the machine. The corporate tax rate is 25 percent and the appropriate discount rate is 10 percent. What is the financial break-even point? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16) Financial break-even point units
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- es Chartreuse Co. has purchased a brand new machine to produce its High Flight line of shoes. The machine has an economic life of six years. The depreciation schedule for the machine is straight-line with no salvage value. The machine costs $732,000. The sales price per pair of shoes is $61, while the variable cost is $15. Fixed costs of $172,000 per year are attributed to the machine. The corporate tax rate is 22 percent and the appropriate discount rate is 9 percent. What is the financial break-even point? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Financial break-even unitsChartreuse Co. has purchased a brand new machine to produce its High Flight line of shoes. The machine has an economic life of four years. The depreciation schedule for the machine is straight-line with no salvage value. The machine costs $468,000. The sales price per pair of shoes is $59, while the variable cost is $13. Fixed costs of $167,000 per year are attributed to the machine. The corporate tax rate is 22 percent and the appropriate discount rate is 7 percent. What is the financial break-even point? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Financial break-even 6,173.91 unitsJames, Inc., has purchased a brand new machine to produce its High Flight line of shoes. The machine has an economic life of five years. The depreciation schedule for the machine is straight-line with no salvage value. The machine costs $530,000. The sales price per pair of shoes is $75, while the variable cost is $27. Fixed costs of $235,000 per year are attributed to the machine. The corporate tax rate is 21 percent and the appropriate discount rate is 8 percent. What is the financial break-even point? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32)
- Pioneer Imports has equipment that it purchased 5 years ago for $2,650,000. The equipment was used for a project that was intended to last for 7 years. However, due to low demand, the project is being shut down two years earlier than planned. The equipment was depreciated using the straight-line method and can be sold for $420,000 today. The company's tax rate is 35 percent. What is the aftertax salvage value of the equipment?Power Manufacturing has equipment that it purchased 6 years ago for $2,500,000. The equipment was used for a project that was intended to last for 8 years and was being depreciated over the life of the project. However, due to low demand, the project is being shut down. The equipment was depreciated using the straight-line method and can be sold for $390,000 today. The company's tax rate is 35 percent. What is the aftertax salvage value of the equipment? Multiple Choice $307,750 $526,500 $431,125 $472,250 $390,000An industrial organization has established an automated assembly line (for $240,000) that will reduce labor costs by $36,000 each year for 10 years. The Internal Revenue Service has ruled that you must depreciate the assembly line on a Straight Line (SL) basis with a depreciable life of 10 years. After-tax MARR is 10% per year. The effective income tax rate is 40%. After 10 years, the machine will have zero salvage value. a) Draw a table showing Before Tax Cash Flow (BTCF) and After-Tax Cash Flow (ATCF). b) Calculate the after-tax PW and IRR. (Use interpolation method to find IRR). Is it feasible?
- Power Manufacturing has equipment that it purchased 5 years ago for $1,850,000. The equipment was used for a project that was intended to last for 7 years. However, due to low demand, the project is being shut down. The equipment was depreciated using the straight-line method and can be sold for $265,000 today. The company's tax rate is 34 percent. What is the aftertax salvage value of the equipment? O O $354,614 $175,386 $309,807 $355,100 $265,000Edwards Manufacturing Company (EMC) is considering replacing one machine with another. The old machine was purchased 3 years ago for an installed cost of $10,000. The new machine costs $24,700 and requires $1,900 in installation costs. Both machines are depreciable using a MACRS five-year recovery period See table attached, for the applicable depreciation percentages.) The firm is subject to a 21% tax rate. In each of the following cases, calculate the initial cash flow for the replacement. a. EMC sells the old machine for $13,000. b. EMC sells the old machine for $7,000. c. EMC sells the old machine for $2,900.A $63,000 machine with a 6-year class life was purchased 2 years ago. The machine will now be sold for $50,000 and replaced with a new machine costing $91,000, with a 10-year class life. The new machine will not increase sales, but will decrease operating costs by $7,000 per year. Simplified straight line depreciation is employed for both machines, and the marginal corporate tax rate is 34 percent. What is the incremental annual cash flow associated with the project?
- Kennon Corporation is planning to replace an old machine. The annual cost of operating the old machinery is P138,600 excluding depreciation, while the estimate for the new machinery is P91,300. The cost of the new machinery is P160,000, net of the trade-in allowance, with an estimated useful life of 8 years, no salvage value. The effective income tax rate is 40% and the cost of capital is 8%. The old machinery has an annual depreciation of P15,000 while the new machinery is estimated to have an annual depreciation of P20,000. The book value of the old machine is zero. Compute for the internal rate of return of the investment. Use 3 decimal places for PV factors.GoHigher is planning to purchase a machine that will cost $24,000. It has a six-year life with no salvage value. GoHigher expects to sell the machine's output of 3,000 units evenly throughout each year. A projected income statement for each year of the asset's life appears below. Sales . $90,000 Costs: Manufacturing... Depreciation on machine. Selling and administrative expenses. Income before taxes .. Income tax (50%). $52,000 4,000 30,000 (86.000) $ 4,000 ( 2,000) $ 2,000 Net income. What is GoHigher's payback period for this machine? 24 years. 1 year. 4 years. 12 years. 6 years.Brown Company is considering the purchase of a new machine to replace an existing one. The old machine was purchased 3 years ago at a cost of $3,000, and it is being depreciated on a straight-line basis to a zero salvage value over a 6-year life. The current market value of the old machine is $2,000. The new machine, which falls into the MACRS 3-year class, has an estimated life of 3 years, it costs $5,000, and Brown plans to sell the machine at the end of the fifth year for $200. The applicable depreciation rates are 0.33, 0.45, 0.15, and 0.07. The new machine is expected to generate before-tax cash savings of $500 per year. The company's tax rate is 40 percent. if the firm’s cost of capital is 14 percent, what is the NPV of the proposed project?