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queenmeg queenmeg
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3 years ago
Jones Crusher Company is evaluating the proposed acquisition of a new machine. The machine will cost $190,000, and it will cost another $33,000 to modify it for special use by the firm. The machine falls into the MACRS 3-year class, and it will be sold after 3 years of use for $110,000. The machine will require an increase in net working capital of $9,000 and will have no effect on revenues, but is expected to save the firm $90,000 per year in before-tax operating costs, mainly labour. The company's marginal tax rate is 40%. What are the terminal year cash flows?

MACRS Depreciation Rates
Year3-Year5-Year
133.33%20.00%
244.45%32.00%
314.80%19.20%


▸ $93,649

▸ $102,649

▸ $148,820

▸ $179,470

▸ $188,740
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Corporate Finance Online

Corporate Finance Online


Edition: 2nd
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ethom947ethom947
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3 years ago
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queenmeg Author
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3 years ago
this is exactly what I needed
nsak
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Yesterday
I appreciate what you did here, answered it right Smiling Face with Open Mouth
jbag1237
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2 hours ago
Smart ... Thanks!
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