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

Quiz 3, Soaring Eagles Corp. has total current assets of $11,706,000, current liabilities of $5,120,000 and a quick ratio of 0.78. What is its level
Sampling distribution ande hypothesis testing, QUESTION 1 A light bulb is advertised as lasting an average of 1000 hours with a standard deviation of
Prepare amortization tables for issuance of the bonds, Wempe Co. sold $3,403,000, 8%, 10-year bonds on January 1, 2014. The bonds were dated January 1
Temporary differences when calculating income tax liability, The books of the Tracker Company for the year ended December 31, 2008, showed pretax inco
Road king trucks case, I would like the all the solutions for Road King Trucks Case includes spreadsheets and summary. I spoke with one of your rep
Financial management, A firm has a sale of 2000 units. It expects to increase its sale to 2800 units. The fixed cost is Rs. 4,00,000. Calculate the de