Corporate FInace Assignment/ Professional Essay Writers

Big-Pear Corp. is considering replacing its existing equipment that is used to produce smart cell phones. This existing equipment was purchase 2 years ago at a base price of $50,000. Installation costs at the time of the machine were $8,000. The existing equipment is considered a 5-year class for MACRS. The existing equipment can be sold today for $60,000 and for $20,000 in 3 years. The new equipment has a purchase price of $150,000 and is also considered a 5-year class for MACRS. Installation costs for the new equipment are $8,000. The estimated salvage value of the new equipment is $80,000. This new equipment is more efficient than the existing one and thus savings before taxes using the new equipment are $11,000 a year. Due to these savings, inventories will see a one-time reduction of $2,000 at the time of replacement. The company’s marginal tax rate is 30% and the cost of capital is 12%. For this project, what is the incremental cash flow in year 1?

Don't use plagiarized sources. Get Your Assignment on
Corporate FInace Assignment/ Professional Essay Writers
Just from $13/Page
Order Now

writing a position paper

MACRS Fixed Annual Expense Percentages by Recovery Class
Year 3-Year 5-Year 7-Year 10-Year 15-Year
1 33.33% 20.00% 14.29% 10.00% 5.00%
2 44.45% 32.00% 24.49% 18.00% 9.50%
3 14.81% 19.20% 17.49% 14.40% 8.55%
4 7.41% 11.52% 12.49% 11.52% 7.70%
5 11.52% 8.93% 9.22% 6.93%
6 5.76% 8.93% 7.37% 6.23%
7 8.93% 6.55% 5.90%
8 4.45% 6.55% 5.90%
9 6.56% 5.91%
10 6.55% 5.90%
11 3.28% 5.91%
12 5.90%
13 5.91%
14 5.90%
15 5.91%
16 2.95%

For your answer, round to the nearest dollar, do not enter the $ sign, use commas to separate thousands, use a negative sign in front of the first number is the cash flow is negative (do not use parenthesis to indicate negative cash flows). For example, if your answer is $3,005.87 then enter 3,006; if your answer is -$1,200.25 then enter-1,200

For this project, the incremental cash flow in year 1 is.  Get Finance Help Today

Recent Blog Posts

No recent articles to show.

Other Blog Posts

What are the key elements of an essay

You may clearly understand what an essay is and have had the experience of writing a number. However, it is […]

Feb 25th, 2022

How to write a research paper fast

The day inevitably comes; you need to submit your assignment. You have been procrastinating on writing your paper until the […]

Feb 24th, 2022

220+ best humanities research paper topics

Choosing a paper topic can be a daunting task for any assignment. A student may face agony trying to come […]

Feb 24th, 2022

How to write a media analysis essay

The media is an integral part of modern society. Think of what would happen to the world if there were […]

Feb 23rd, 2022

Great tricks on how to write a hypothesis in 2022

A hypothesis is a statement that can be proven by scientific research. It proves the theory of action and reaction, […]

Feb 22nd, 2022

How to get better at math

Math is not difficult. However, it is complex and tough compared to other subjects and requires a little bit more […]

Feb 22nd, 2022