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Olenka [21]
3 years ago
11

Metro Corporation will spend $1 million for special manufacturing equipment. Shipping and installation charges will amount to $1

75,000 and an initial increase in net working capital of $50,000 will be required. The equipment will replace an existing machine that has a salvage value of $85,000 and a book value of $140,000. If Metro has a current marginal tax rate of 34%, what is the amount of the initial outlay for this project
Business
1 answer:
Dafna1 [17]3 years ago
4 0

Answer: (1121300)

Explanation:

The initial outlay for the project will be:

Machinery purchase price = =-1000000-175000 = (1,175,000)

Less: Proceed from old machine =

= =85000+(140000-85000) × 34% = 103,700

Net working capital = 50,000

Initial outlay = (1121300)

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3 years ago
List 5 things you have purchased in the last year because of a marketing function. Describe what function of marketing was evide
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1- smartphone

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8 0
3 years ago
Consider a $10,000 machine that will reduce pretax operating costs by $3,000 per year over a 5-year period. Assume no changes in
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Answer:

A) $83

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Depreciation per year = 10,000/5 = 2,000

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aftertax OCF per year = (3,000 - 2,000)*(1-0.34) + 2,000

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NPV = $83.493

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Answer:

T

Explanation:

Hope that helps

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