QUESTION 25 A new project will generate $190,000 in new sales per year. The project costs $1,000,000 and will be depreciated using a 7-year MACRS schedule. The cash operating costs are $76,000. If the tax rate is 37%, what is the third year's ONOCFt? $419,287 $173,290 $154,199 $136,533 Onone of the above
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- 7.2 Project Beta is a 6-year project which requires an initial outlay of $4,000. This outlay will be depreciated using straight-line depreciation over the life of the project. It will generate incremental revenue of $2000 per year and incremental costs (excluding depreciation) of $500. The tax rate is 30%. What is the annual depreciation amount? a. $867 b. $667 c. $1533 d. $1333 Clear my choiceProject Section 1: You are considering buying an industrial equipment whose price is 445000. The equipment is expected to earn an annual revenue of $150,000. The equipment will be depreciated under MACRS as a five-year recovery property. The equipment will be used for seven years, at the end of which time, you can sell it for $50,000. Your company's marginal tax rate is 35% over the project period. Perform the following: a) Determine the net after-tax cash flows for each period over the project life. b) Net present worth assuming company MARR 15% . c) Annual equivalent cash flow company MARR 15%. = =7.2 Project Beta is a 6-year project which requires an initial outlay of $4,000. This outlay will be depreciated using straight-line depreciation over the life of the project. It will generate incremental revenue of $2000 per year and incremental costs (excluding depreciation) of $500. The tax rate is 30%. What is the project's annual tax payable? a. $50 b. $583 c. $250 d. $117 Clear my choice
- Question 5 An investment of $50,000 is made to purchase machinery that will allow us to manufacture a new product. The annual expenses to make the product are (5,000 + 5x) and the revenues from the product are 30 x, where x = the number of products sold each year. How many products must be sold per year, x, to break even? Consider a 7 year project life and an MARR of 12%.Intro You are evaluating an investment project costing $49,000 initially. The project will provide $3,000 in after-tax cash flows in the first year, $4,000 in the second year and $7,000 each year thereafter for 10 years. The maximum payback period for your company is 9 years. Part 1 What is the payback period for this project? 0+ decimals Submit Part 2 Should your company accept this project? Yes No Submiti will 10 upvotes urgent Your firm needs a computerized machine tool lathe which costs $56,000 and requires $12,600 in maintenance for each year of its 3-year life. After three years, this machine will be replaced. The machine falls into the MACRS 3-year class life category. Assume a tax rate of 35 percent and a discount rate of 12 percent. Calculate the depreciation tax shield for this project in year 3.
- Question 2: SABIRCO wants to investigate the following project. Initial investment $1,000,000 Annual income $200,000 in year 1 and increase every year by 40,000. No salvage value MARR = 10% a) What is the discounted payback period? b) Assuming the project to be used for 8 years. What is the end balance of the project at end of year 8?Q.2 A piece of construction equipment costs $325,000. It will be depreciated as Modified Accelerated Cost Recovery System (MACRS) 7-year property, and the firm's tax rate is 30%. The equipment generates $80,000 in net revenue per year. The after-tax cash flow in Year 3 will be $______.Question 6 What is the IRR of Project A if the outlay is $6,600 and the annual after-tax cash inflows are $2000 for four years? 8.16% 9.16 10.26 12.17 10.12 Question 7 What is the NPV of Project A? $635.49 0345.09 325.59 32550