Firm X is considering the replacement of an old machine with one that has a purchase price of $80,000. The current market value of the old machine is $20,000 but the book value is $39,000. The firm's tax rate for ordinary income is 27%. What is the net cash outflow for the new machine after considering the sale of the old machine?
$60,740
$67,220
$54,870
$51,470
Assume a corporation has earnings before depreciation and taxes of $100,000, depreciation of $50,000, and that it has a 35 percent tax bracket. What are the after-tax cash flows for the company?
$77,300
$87,100
$86,300
$82,500
An asset fitting into the 7-year MACRS category was purchased 2 years ago for $115,000. The book value of this asset is now (Do not round intermediate calculations.)
$84,603
$70,403
$65,203
$75,003
Assume a corporation has earnings before depreciation and taxes of $95,000, depreciation of $45,000, and that it has a 30 percent tax bracket. What are the after-tax cash flows for the company?
$80,000
$83,800
$84,600
$74,800
Firm X is considering the replacement of an old machine with one that has a purchase price of $65,000. The current market value of the old machine is $25,000 but the book value is $36,000. The firm's tax rate for ordinary income is 35%. What is the net cash outflow for the new machine after considering the sale of the old machine?
$42,020
$48,500
$36,150
$32,750
A project requires an investment of $900 and has a net present value of $300. If the IRR is 11%, what is the profitability index for the project? (Round your answer to 2 decimal places.)
2.56
0.53
0.11
1.33
The Wet Corp. has an investment project that will reduce expenses by $20,000 per year for 3 years. The project's cost is $15,000. If the asset is part of the 3-year MACRS category (33.33% first year depreciation) and the company's tax rate is 33%, what is the cash flow from the project in year 1? (Do not round intermediate calculations. Round your answer to the nearest dollar amount.)
$16,510
$15,050
$15,830
$14,500
An asset fitting into the 7-year MACRS category was purchased 2 years ago for $85,000. The book value of this asset is now (Do not round intermediate calculations.)
$46,837
$66,237
$52,037
$56,637
The Wet Corp. has an investment project that will reduce expenses by $25,000 per year for 3 years. The project's cost is $35,000. If the asset is part of the 3-year MACRS category (33.33% first year depreciation) and the company's tax rate is 34%, what is the cash flow from the project in year 1? (Do not round intermediate calculations. Round your answer to the nearest dollar amount.)
$21,246
$21,926
$20,466
$19,916
A project requires an investment of $1,200 and has a net present value of $400. If the IRR is 13%, what is the profitability index for the project? (Round your answer to 2 decimal places.)
2.56
0.53
0.13
1.33