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

Case analysis: reporting issues & objectives, tax issues, Hello, I wonder if I get some help on this assignment. Please let me know how much it wi
What was the annual amount of depreciation for the years 2009, 2010, and 2011, using the straight-line method of depreciation?
Compare growth of revenues versus income over time and between the two companies - how can you explain the difference in profitability between the two
A company acquired some land (independently appraised at $12,000) and paid for it by issuing 1,000 shares of its common stock (par $10 per share; no
What kind of revenue will you earn? When will you record it as revenue? How will you decide when to record the revenue?
What total incremental costs will Martinez incur if it increases production from 10,000 to 10,001 units and what is the total amount expressed on a pe
What accounting standards are used - what auditing standards are used by the external auditors
Calculate the basic earnings per share of common stock for the 2014 fiscal year and calculate the Basic Earnings per share of common stock for the 201
Journalize the January transactions and journalize the adjusting entries at January 31 for the outstanding notes payable.
Calculate the discount rate used by the lender and calculate the effective interest rate (APR) on the loan and use the horizontal model (or write the