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stepan [7]
2 years ago
13

"Explorer, Inc. is considering a new 4-year project that requires an initial fixed asset (equipment) investment of $200,000. The

fixed asset is three-year MACRS property for tax purposes. In four years, the equipment will be worth about half of what we paid for it. The project is estimated to generate $500,000 in annual sales, with costs of $400,000. The firm has to invest $100,000 in net working capital at the start. After that, net working capital requirements will be 25 percent of sales. The tax rate is 21 percent. What is the incremental cash flow in year 4
Business
1 answer:
SOVA2 [1]2 years ago
7 0

Answer:

The Incremental cash flow in year 4 is $161,112

Explanation:

According to the given data, the Statement showing accumulated depreciation and book value of asset  is as follows:

Year Current year depreciation Accumulated depreciation Book value

0                                                                                   $200,000

1 $200,000*33.33%                          $66,660                    133,340

2 $200,000*44.45%                            $88,900                   44,440

3 $200,000*14.81%                           $29,620                   14,820

4 $200,000*7.41%                            $14,820                     0

After tax salvage value of equipment at the end of 4th year  =(Sale value-Book value)*(1-tax rate)

=[($200,000*50%)-$0]*(1-0.21)

=$79,00 0

Statemet showing Incremental cash flow in year 4

Amout($)

Sales       500,000

Less:Cost 400,000

Less:Depreciation 14,820

Earning before tax 85,180

Less:Tax21% 17,887

Earning after tax 67,292

Add:Depreciation 14,820

Add:after tax salvage value of equipment 79,000

Net cash flow $161,112

The Incremental cash flow in year 4 is $161,112

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Mike, an advocate of a certain religion, publishes an article in New Times magazine insisting that Congress base all federal law
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Answer:

<u>Press, Speech & Religion </u>

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As per The First Amendment, the Congress had been prohibited to make any such laws which restrict an individual's freedom of speech, curtail the freedom of press or those which in any form promote or curb any religion.

In the given case, Mike, an advocate, supports a certain religion and went on to publish an article in a magazine, expressing his views and insisting upon Congress to base Federal Laws as per the principles of his religion.

The First amendment guarantees Mike, the freedom of speech i.e expression, freedom to practice the religion of his choice and the freedom of press i.e the freedom to publish an article expressing his views in a magazine.

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3 years ago
The marginal cost of a product can be thought of as the cost of producing one additional unit of output. For​ example, if the ma
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Check the explanation

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3 years ago
1. Exhibit 1.1; USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
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A stock had returns of 17.88 percent, −5.16 percent, and 20.39 percent for the past three years. What is the variance of the ret
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3 years ago
Question 8 of 10
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It is important to name an executor B. To provide that beneficiaries acquire whatever they want from the estate.

<h3>Who is an executor?</h3>

An executor exists as someone who stands responsible for executing or following an assigned task or duty. The feminine form, executrix, may sometimes be utilized.

An executor typically presents the will for probate, brings the action to rescue the assets of the estate, creates distributions of effects to beneficiaries, and produces the debts and taxes of the estate.

An executor handles your estate when it's in probate (aka the procedure of being distributed and carried out). Particularly, they begin and observe through the probate approach. They also manage your assets, pay your obligations, and allocate property to your heirs as summarized in your will

Hence, It is important to name an executor B. To provide that beneficiaries acquire whatever they want from the estate.

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7 0
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