Home / Questions / Mars Inc is considering the purchase of a new machine that costs $80000 This machine will ...
Mars Inc. is considering the purchase of a new machine that costs $80,000. This machine will reduce manufacturing costs by $20,000 annually. Mars will use the 3-year MACRS method (shown below) to depreciate the machine, and it expects to sell the machine at the end of its 5-year life for $10,000 salvage value. The firm expects to be able to reduce net operating working capital by $8,000 when the machine is installed, but the net working capital will return to the original level when the project is over (i.e., after 5 years). Mars's marginal tax rate is 40 percent, and it uses a 12 percent cost of capital to evaluate projects of this nature. Calculate the net cash flows of the project. Cash outflows should be negative numbers, and round it to a whole number, e.g., -23,500.
Year | MACRS % |
1 | 0.33 |
2 | 0.45 |
3 | 0.15 |
4 | 0.07 |
5 | 0.11 |
6 | 0.06 |
CF0 | |
CF1 | |
CF2 | |
CF3 | |
CF4 | |
CF5 |
May 21 2020 View more View Less
The fixed and variable costs for three potential manufacturing plant sites for a rattan chair weaver are shown:a) Over what range of production is each location optimal?b...
Jul 30 2020Equity Entries with DifferentialEnnis Corporation acquired 35 percent of Jackson Corporation’s stock on January 1, 20X8, by issuing 25,000 shares of its $2 par value comm...
Jul 09 2020Sean Nah, the bookkeeper for Revell Co., received a bank statement from Lone Bank. Sean noticed a $250 mistake made by the bank in the companyâs favor. Sean called his ...
Aug 01 2021Prepare an adjusted trial balance. If an amountLedger Accounts, Adjusting Entries, Financial Statements, andClosing Entries; Optional Spreadsheet.The unadjusted trial bal...
Jun 10 20211.Compute Northtown's currentâ ratio, debtâ ratio, and earnings per share. Round all ratios to two decimal places.2.Compute the three ratios after evaluating the effe...
Jun 25 2021Sarasota Corp. sells a snowboard, EZslide, that is popular with snowboard enthusiasts. Below is information relating to Sarasota Corp.âs purchases of EZslide snowboards...
Aug 08 2021Find two unit vectors that are orthogonal to both and
Jul 19 2021Which of the following describes "VPN"? Select one: a. Used to transmit general data b. increase the network bandwidth. c. use IP tunneling system d. An acronym for virtu...
Apr 14 2021Kenneth and Mary Norpel purchased a house, and Kenneth attached a 35-foot flagpole to it. He did not obtain the permission of the architectural committee of the Stone Hil...
Aug 16 2021