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?

Ask an Expert for Solution

Ask an Expert for Answer Macrs rates of campbell company

Request for Solution Files

Expected delivery within 24 Hours

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


q standards for accounting and review servicesstatements on standards for accounting and review services ssars - statements issued by american
the managers of merton medical clinic are analyzing a proposed project the projects most likely npv is 120000 but as evidenced by the following
calculation of break even sales in dollarsselling price per unit-20total fixed expenses-5000variable expenses per unit-15find break-even sales in
Which of the following statements regarding 30-year monthly payment amortized mortgage with the nominal interest rate of 10% is CORRECT?
ely purchased a patent with a remaining legal life of ten years from backo on january 1 2010 for 300000 ely expected to use the patent for five years
analysis of various methods of inventory system and its effect on ending inventory and cost of goods soldglanville distribution markets cds of the
conversion of members to creditors winding upif the liquidator in a members winding up forms the opinion that the company will not be able to pay its
calculation the amount of gain or loss on sale of the fixed assetsmerton company purchased a building at a cost of 364000 on january 1 2006nbsp
determine the term- understandabilityaccounting reports must be expressed as clearly as possible and must be understood by those at whom the
the gladys corporation buys office equipment costing 426000 on may 12 2013 in 2015 new and improved models of the equipment make it obsolete and