Find your question
and Get expert's answers*
Homework Help
*Click here to submit
Refer a Friend
Discount up to 15%*
Prepared References
Save up to 50%*
Homework Help >> Financial Accounting
  Macrs rates of campbell company

Problem1. The Campbell Company is considering adding the robotic paint sprayer to its production line. The sprayer%u2019s base price is $1,080,000, and it would cost another $22,500 to inaugurate it. The machine falls in the MACRS 3-year class, and it would be sold out after 3 years for $605,000. The MACRS rates for the first 3 years are 0.3333, 0.4445, and 0.1481. The machine would need an increase in net working capital (inventory) of $15,500. The sprayer wouldn’t change revenues, but it is anticipated to save the firm $380,000 per year in before-tax operating costs, mainly labour. Campbell%u2019s marginal tax rate is 35%.

a. What is Year 0 net cash flow?

b. What are net operating cash flows in Years 1, 2, and 3?

c. What is additional Year-3 cash flow (i.e., the after-tax salvage and the return of working capital)?

d. Based on your IRR analysis, if the project%u2019s cost of capital is 12%, should the machine be bought?


Macrs rates of campbell company

Request for solution file

Course: Financial Accounting

Ref. No:- TGS03654

Like US:-
Assignment Help

Ask an Expert & Get Answer

  • Quality work delivery
  • 100% Plagiarism free
  • Time on delivery
  • Privacy of work
Order Now
More Financial Accounting Questions

star mart company inc issued 100000 of bonds payable on june 30 2010 the bonds are to be redeemed in five years while paying interest semiannually at
in the spring of each year steinbrook colleges theater department puts on a contemporary play before the performance the theater manager instructs
computation of value of mortgagekim and dan bergholt are both government workers they are considering purchasing a home in the washington dc area for
amortized paymentyou purchase a house that costs 800000 with an 8 30-year mortgage you make a 20 down payment to avoid pmi insurancei what is your
what are some examples of co branded foods is cool ranch doritos
multiple choice questions on construction costing and accounting1 indiana co began a construction project in 2008 that will provide it 150 million
a classmate is considering dropping his or her accounting class because he or she cannot understand the rules of debits and creditsexplain the rules
Professors Harry Markowitz and William Sharpe got their Nobel Prize in economics for their contributions to the?
income statement showing the byproduct as a cost reduction during productionthe maryland company prepares lumber for companies who manufacture
this project should be completed using excel with formulas and linked data the parameters of the project are below1 prepare an income statement for