Question

BuiltRite Corporation has decided to sell some old equipment to make room for a new project. The salvage value of the equipment is $300,000. The firm would be able to recover $60,000 in working capital when the equipment is sold. Their tax rate is 21%. The old equipment has a book value of $210,000. What is the terminal cash flow

Answer 1

Terminal cash flow = $281,a hundred + $60,000 = $341,one hundred.

Terminal cash flows are cash flows at the end of the challenge after all taxes are deducted. In different phrases, terminal coins flows are the net amount made by the organization after disposing of the asset and necessary amounts are paid. these are calculated after the disposal of assets and all different amounts are paid (fees, taxes, and many others.).

The calculation of NPV encompasses many economic topics in a single component: cash flows, the time fee of cash, the cut price rate over the period of the undertaking (generally the weighted common fee of capital (WAAC)), terminal value, and salvage fee.

For the terminal cost to be significant it should be discounted to the existing use of a discount fee. The terminal cost is added to the prevailing value of an asset's cash flows within the years preceding it to calculate the full gift cost.

Learn more about Terminal cash flow here: brainly.com/question/24179665

#SPJ4