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defon
3 years ago
5

After the foundation is built ,the blank can begin. Fill in the blank.

Business
1 answer:
maxonik [38]3 years ago
4 0
Construction building
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Should highschoolers have nap time? <br> Best answer gets brainliest and 100 points!
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3 years ago
The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $940,000,
Tanya [424]

Answer:

a. Year 0 Net Cash Flows = $984,000

b. We have:

Year 1 net operating cash flows = $306,159

Year 2 net operating cash flows = $332,986

Year 3 net operating cash flows = $261,479

c. Additional Year 3- cash flow = $504,877

d. The machine should be purchased.

Explanation:

We start by first calculating the following:

Initial Investment = Base Price + Modification Cost = $940,000 + $25,000 = $965,000

Useful Life = 3 years

Depreciation in Year 1 = 0.3333 * $965,000 = $321,634.50

Depreciation in Year 2 = 0.4445 * $965,000 = $428,942.50

Depreciation in Year 3 = 0.1481 * $965,000 = $142,916.50

Book Value at the end of Year 3 = $965,000 - $321,634.50 - $428,942.50 - $142,916.50 = $71,506.50

After-tax Salvage Value = Salvage Value - (Salvage Value - Book Value) * Marginal tax rate = $624,000 – ($624,000 - $71,506.50) * 25% = $485,877

Initial Investment in NWC = $19,000

We can now proceed as follows:

a. What is the Year 0 net cash flow?

Year 0 Net Cash Flows = Initial Investment + Initial Investment in NWC = $965,000 + $19,000 = $984,000

b. What are the net operating cash flows in Years 1, 2, 3?

Year 1 net operating cash flows = (Pretax Cost Saving * (1 - tax)) + (tax * Depreciation in year 1) = ($301,000 * (1 – 0.25)) + (0.25 * $321,634.50) = $306,159

Year 2 net operating cash flows = (Pretax Cost Saving * (1 - tax)) + (tax * Depreciation in year 2) = ($301,000 * (1 – 0.25)) + (0.25 * $428,942.50) = $332,986

Year 3 net operating cash flows = (Pretax Cost Saving * (1 - tax)) + (tax * Depreciation in year 3) = ($301,000 * (1 – 0.25)) + (0.25 * $142,916.50) = $261,479

c. What is the additional Year 3- cash flow (i.e. after tax salvage and the return of working capital)?

Additional Year 3- cash flow = NWC recovered + After-tax Salvage Value = $19,000 + $485,877 = $504,877

d. If the project's cost of capital is 12%, should the machine be purchased?

This can be determined from the net present value (NPV) calculated as follows:

NPV = -$984,000 + ($306,159/1.12^1) + ($332,986/1.12^2) + ($261,479/1.12^3) + ($504,877/1.12^3) = $100,287.71

Since the NPV of the machine of $100,287.71 is positive, the machine should be purchased.

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3 years ago
Someone with dollar bills to lend will never agree to make a loan with a nominal interest rate of less than zero because:
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7 0
3 years ago
SMOLIRA GOLF CORP. 2018 Income Statement Sales $ 515,454 Cost of goods sold 365,628 Depreciation 46,713 Earnings before interest
Leona [35]

Answer:

Note: Find attach the other missing table of question

Particulars                                         Amount$

<u>Cash flow from operating activities</u>

Income                                                62,855

Depreciation                                      46,713

Increase in AR                                    (10,685)  

Increase in inventory                          (39,202)  

Increase in AP                                     3,540

Decrease in notes payable                (3,258)  

Increase in other CL                            <u>4,590</u>

Cash flow from operating activities A               $64,553

<u>Cash flow from Investing activities</u>

Sale of invt

Purchase of PPE =                            ($102,771)

($522,333 + $46,713 - $466275)

Cash flow from Investing activities  B              ($102,771)

<u>Cash flow from Financing activities</u>

Issue of long term debt                      66,525

Dividends Paid                                     (25,000)

Cash flow from Financing activities C                 $41,525

Net change in cash & cash equivalents A+B+C  $3,307.00

Opening cash and cash equivalents                      $36,185

Closing cash and cash equivalents                       $39,492

3 0
4 years ago
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