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

q design a organisational strategythe objectives to which organisational approach relates depend on the relative power of different stakeholders
objectives of inventory managementafter going through this section you will be capable to highlight the requirement for and nature of inventory
contributions of fixed assets may affect more than one type of fund discovery barn a not-for-profit science center for children received a
question 1 a payment in lieu of tax of 300000-evaluated at 10 percent of its operating income-was made from the townships use enterprise fund to its
referring to walmarts 2012 annual reporta what is the functional currency of their foreign subsidiariesb on average did the us dollar strengthen or
activity-based costing abcan accounting method that assigns identifiable costs and allocates common costs to definite product lines or business
q what is depreciation reserve fund depreciation reserve fund is the fund specially reserved for replacement of assets once the assets are purchased
your company is considering investing in its own transport fleet the present position is that carriage is contracted to an outside organization the
journal entries to record the transactionsassuming the perpetual inventory system is used complete journal entries for the following transactions as
preparation of journal entries to record stock dividend and stock splitklein corporations stockholders equity section at december 31 2001 appears