New project analysis You must evaluate a proposal to buy a new milling machine. The base price is $108,000, an
Written by Josh on September 26, 2009 – 9:04 am -Tags: Capital Budgeting, Project Cash Flow, Wacc
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You must evaluate a proposal to buy a new milling machine?
Written by Josh on November 26, 2008 – 5:43 pm -The low price is $ 108,000 and costs of shipping and add the other $ 12,500. The car falls into class three years of MACRS and would be sold after 3 years for $ 65,000. The applicable depreciation rates are 33, 45, 15 and 7 per cent. The machine would require an increase of $ 5500 liquid capital (inventory increased less accounts payable increased). There would have effect on income, but labor costs of pretassazione decrease by $ 44,000 a year. The marginal rate is 35 per cent and the WACC is 12 percent. In addition, the constant spent $ 5,000 last year studying the possibility of using the machine. a. How should the $ 5,000 spent last year to be treated? b. What is the net cost of the machine for entry into the capital budget purposes, namely,... more
Tags: 3 Years, Project Cash Flow, Proposal
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