Question Details

(Solved by Expert Tutors) Edward's Manufactured Homes is considering replacing some machines.?Edw


purchased the current machinery 2 years ago for $320.??The company is considering replacing this machinery today with newer machines that utilize the latest in technology.?The new machines will cost $400, plus an additional $15 for installation. We will shut down production in 4 years.?The old machines can be sold for $140 to a foreign firm for use in its production facility in South America.?Both machines are classified as 5-year property for MACRS.?The old machines will have expected salvage value of $0 in four years.?
?
Annual sales, due to the new machine?s increased production, will increase from $1500 to $1520.?The new machines are more efficient and should lower net annual variable operating costs by $35.??Annual Fixed costs will remain the same at $700.?Over the past two years, Edward?s has spent $13 testing the various available machines.??In 4 years, we estimate that the value of the new machines to be $125.??We currently have $75 in working capital invested in the project, which is not expected to change if we buy the new machine.?The firm?s tax rate is 35%.?The cost of capital is 12%.??
a. (3 points) What are the initial cash flows in year 0?
b. (4 points) What are the operating cash flows in year 2?
c. (3 points) What are the terminal cash flows in year 4?

 


Solution details:

Pay using PayPal (No PayPal account Required) or your credit card . All your purchases are securely protected by .
SiteLock

About this Question

STATUS

Answered

QUALITY

Approved

DATE ANSWERED

Apr 19, 2020

EXPERT

Tutor

ANSWER RATING

YES, THIS IS LEGAL

We have top-notch tutors who can do your essay/homework for you at a reasonable cost and then you can simply use that essay as a template to build your own arguments.

You can also use these solutions:

  • As a reference for in-depth understanding of the subject.
  • As a source of ideas / reasoning for your own research (if properly referenced)
  • For editing and paraphrasing (check your institution's definition of plagiarism and recommended paraphrase).
This we believe is a better way of understanding a problem and makes use of the efficiency of time of the student.

NEW ASSIGNMENT HELP?

Order New Solution. Quick Turnaround

Click on the button below in order to Order for a New, Original and High-Quality Essay Solutions. New orders are original solutions and precise to your writing instruction requirements. Place a New Order using the button below.

WE GUARANTEE, THAT YOUR PAPER WILL BE WRITTEN FROM SCRATCH AND WITHIN A DEADLINE.

Order Now