Finance Assignment | Professional Writing

Question 5 1.05 pts The Greentree Lumber Company is attempting to evaluate the profitability of adding another cutting line to its present sawmill operations. They would need to purchase two more acres off land for $30,000 (total). The equipment would cost $130,000 and could be depreciated over a five-year recovery period with the MACRS method. Gross revenue is expected to be $50,000 per year for five years, and operating expenses will be $15,000 annually for five years. It is expected that this cutting line will be closed down after five years. The firm’s effective income tax rate is 50%.

If the company’s after-tax MARR is 5% per year, answer the following questions. EOY Depr* TI | T (50%) BTCF |-$ A $ C $35.000 $35,000 $35,000 $35.000 $ H ** $ D $41,600 $24.960 $14.976 $7,488 $E -$6,600 $10.040 $20.024 $27.512 0-$14.976** $ F $3,300 -$5,020 -$10,012 -$13.756 $7,488 ATCF – B $G $38,300 $29,980 $24,988 $21.244 $.1 Match A in the after-tax analysis table above with the correct description. [Choose] Match B in the after-tax analysis table above with the correct description. [Choose] Match Cin the after-tax analysis table above with the correct description. [Choose ] Match D in the after-tax analysis table above with the correct description. [Choose ] Match Ein the after-tax analysis table above with the correct description. [Choose ] Match F in the after-tax analysis table above with the correct description. [Choose ] Match G in the after-tax analysis table above with the correct description. [Choose] Match H in the after-tax analysis table above with the correct description. [Choose ] Match / in the after-tax analysis table above with the correct description. [Choose] What is the PW(MARAT)? [Choose] Is this a profitable investment? [Choose] [Choose ] 37,488 160,000 4,500 35,000 9,000 30,000 Yes, it is a profitable investment. -$3,742.83 30,500 26,000 No, it is not a profitable investment.

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