A Project Requires an Initial Investment of $100,000 and Installation Cost

A project requires an initial investment of $100,000 and installation Cost for $5 Only

Initial Investment

A project requires an initial investment of $100,000 and installation cost of $20,000. The financial manager of the company expects this project will cut the direct production costs by $30,000 per year. For tax purposes the project can be depreciated straight-line over 5 years.. The company will pay insurance expense of $5,000 per year beginning with the installation of the machine. The salvage value of the machine is expected to be $15,000. If the company pays tax at a rate of 20% and the opportunity cost of capital is 20%, is the project attractive to the company?

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Bandera Corporation Straight-line Depreciation

Bandera Corporation Straight-line Depreciation in $4 onlyBandera Corporation

Bandera Corporation has been using the straight-line depreciation method to depreciate some office equipment that was acquired at the beginning of 2012. At the beginning of 2015, Pinnacle decided to change to the sum-of-the-years’-digits method. The equipment cost $150,000 and is expected to have no salvage value. The estimated useful life of the equipment is five years. The tax rate is 35%.

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If you need any type of help regarding Homework, Assignments, Projects, Case study, Essay writing or any thing else then just email us at [email protected]solvemyquestion.com.  We will get back to you ASAP. Do not forget to maintain the time frame you need you work to be done.