An asset fitting into the 10-year MACRS category was purchased 2 years ago for $125,000. The book value of this asset is now (Do not round intermediate calculations.)
$94,600
$84,800
$90,000
$104,200
A project requires an investment of $800 and has a net present value of $500. If the IRR is 12%, what is the profitability index for the project? (Round your answer to 2 decimal places.)
1.62
0.12
2.86
0.82
Assume a corporation has earnings before depreciation and taxes of $80,000, depreciation of $45,000, and that it has a 30 percent tax bracket. What are the after-tax cash flows for the company?
$64,300
$73,300
$74,100
$69,500
Firm X is considering the replacement of an old machine with one that has a purchase price of $80,000. The current market value of the old machine is $26,000 but the book value is $33,000. The firm's tax rate for ordinary income is 35%. What is the net cash outflow for the new machine after considering the sale of the old machine?
$57,420
$51,550
$48,150
$63,900
Skyline Corp. will invest $280,000 in a project that will not begin to produce returns until the end of the 5th year. From the end of the 5th year until the end of the 12th year (8 periods), the annual cash flow will be $63,000.
Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods.
a. Calculate the net present value if the cost of capital is 8 percent. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places.)
b. Should the project be undertaken?
No
Yes