HI PLEASE SOLVE THIS PROBLEM IN 60 MINS MAX !! SHOW ALL YOUR WORK PLEASE A Manuf
ID: 1173274 • Letter: H
Question
HI
PLEASE SOLVE THIS PROBLEM IN 60 MINS MAX !!
SHOW ALL YOUR WORK PLEASE
A Manufacturing Company, Helpful Metal Gadgets wanted to replace their existing Press with a new one. The Old Press was bought at $780,000, 20 years ago and it surpassed its useful life and it is expected to be sold today at Market value $60,000. The New Press will be purchased at $1,500,000 and it has a MACRS-ADS- Recovery Period of 12 years and it requires an additional Net Working capital of $86,000. Helpful Metal Gadgets is expected to generate a net cash flow (Revenues Expenses) of $ 300,000 per year. If the Tax rate for the Helpful Company is 40%, and it requires MARR after tax = 12%. Find: The Present Worth (PW) for the After-Tax Cash Flows (ATCFs) for this New Press if Helpful company decided to sell the Old Press today.Explanation / Answer
PARTICULARS 1 2 3 4 5 6 7 8 9 10 11 12 Depreciation % 10.94% 11.13% 9.74% 8.52% 7.46% 7.33% 7.33% 7.33% 7.33% 7.32% 7.33% 7.32% Net Cash Flow 300000 300000 300000 300000 300000 300000 300000 300000 300000 300000 300000 300000 (-) Depreciation -164100 -166950 -146100 -127800 -111900 -109950 -109950 -109950 -109950 -109800 -109950 -109800 Before Tax Cash Flow 135900 133050 153900 172200 188100 190050 190050 190050 190050 190200 190050 190200 (-) Tax @ 40% -54360 -53220 -61560 -68880 -75240 -76020 -76020 -76020 -76020 -76080 -76020 -76080 After Tax Cash Flow 81540 79830 92340 103320 112860 114030 114030 114030 114030 114120 114030 114120 (+) Depreciation 164100 166950 146100 127800 111900 109950 109950 109950 109950 109800 109950 109800 NET CASHFLOW 245640 246780 238440 231120 224760 223980 223980 223980 223980 223920 223980 223920 P.V. Factor 0.892857 0.797194 0.71178 0.635518 0.567427 0.506631 0.452349 0.403883 0.36061 0.321973 0.287476 0.256675 P.V. of Cashflow 219321.4 196731.5 169716.9 146880.9 127534.9 113475.2 101317.2 90461.77 80769.43 72096.25 64388.9 57474.69 P.V. OF CASHFLOW GENERATED 1440169
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