Whats up Bitches???
I Chose to No Longer Post
Joined: Apr 2004
Posts: 37,827
Re: Whats up Bitches???
A firm is considering an investment of $28,000,000.00 (purchase price) in new equipment to replace old equipment with a book value of $12,000,000.00 and a market value of $20,000,000.00. If the firm replaces the old equipment with the new equipment, it expects to save $17,500,000.00 in operating costs the first year. The amount of these savings will grow at a rate of 11.00% per year for each of the following three years. The old equipment has a remaining life of four years and is depreciated using straight line depreciation. The new equipment is being depreciated by the MACRS method (33.30% of the original book value of the new equipment will be depreciated in the first year, 39.90% will be depreciated in the second year, 14.80% will be depreciated in the third year, and 12.00% will be depreciated in the final year). The salvage value of both the old equipment and the new equipment at the end of four years is $0.00. In addition, replacement of the old equipment with the new equipment requires an immediate increase in net working capital of $6,000,000.00, which will not be recovered until the end of the four-year investment. Assume that the purchase and sale of equipment occurs today and all other cash flows occur at the end of their respective years. If the firm’s cost of capital is 14.00% and the firm is subject to a 35.00% tax rate, find:
a. The net investment (CF0)
b. The after-tax incremental cash flow at the end of each year
c. The internal rate of return on the investment
d. The net present value of investment
a. The net investment (CF0)
b. The after-tax incremental cash flow at the end of each year
c. The internal rate of return on the investment
d. The net present value of investment
Certified
Joined: Jan 2003
Posts: 13,786
From: Lauderdale
Re: Whats up Bitches???
A firm is considering an investment of $28,000,000.00 (purchase price) in new equipment to replace old equipment with a book value of $12,000,000.00 and a market value of $20,000,000.00. If the firm replaces the old equipment with the new equipment, it expects to save $17,500,000.00 in operating costs the first year. The amount of these savings will grow at a rate of 11.00% per year for each of the following three years. The old equipment has a remaining life of four years and is depreciated using straight line depreciation. The new equipment is being depreciated by the MACRS method (33.30% of the original book value of the new equipment will be depreciated in the first year, 39.90% will be depreciated in the second year, 14.80% will be depreciated in the third year, and 12.00% will be depreciated in the final year). The salvage value of both the old equipment and the new equipment at the end of four years is $0.00. In addition, replacement of the old equipment with the new equipment requires an immediate increase in net working capital of $6,000,000.00, which will not be recovered until the end of the four-year investment. Assume that the purchase and sale of equipment occurs today and all other cash flows occur at the end of their respective years. If the firm’s cost of capital is 14.00% and the firm is subject to a 35.00% tax rate, find:
a. The net investment (CF0)
b. The after-tax incremental cash flow at the end of each year
c. The internal rate of return on the investment
d. The net present value of investment
a. The net investment (CF0)
b. The after-tax incremental cash flow at the end of each year
c. The internal rate of return on the investment
d. The net present value of investment
Retired
Joined: Mar 2003
Posts: 37,967
From: .
Re: Whats up Bitches???
A firm is considering an investment of $28,000,000.00 (purchase price) in new equipment to replace old equipment with a book value of $12,000,000.00 and a market value of $20,000,000.00. If the firm replaces the old equipment with the new equipment, it expects to save $17,500,000.00 in operating costs the first year. The amount of these savings will grow at a rate of 11.00% per year for each of the following three years. The old equipment has a remaining life of four years and is depreciated using straight line depreciation. The new equipment is being depreciated by the MACRS method (33.30% of the original book value of the new equipment will be depreciated in the first year, 39.90% will be depreciated in the second year, 14.80% will be depreciated in the third year, and 12.00% will be depreciated in the final year). The salvage value of both the old equipment and the new equipment at the end of four years is $0.00. In addition, replacement of the old equipment with the new equipment requires an immediate increase in net working capital of $6,000,000.00, which will not be recovered until the end of the four-year investment. Assume that the purchase and sale of equipment occurs today and all other cash flows occur at the end of their respective years. If the firm’s cost of capital is 14.00% and the firm is subject to a 35.00% tax rate, find:
a. The net investment (CF0)
b. The after-tax incremental cash flow at the end of each year
c. The internal rate of return on the investment
d. The net present value of investment
a. The net investment (CF0)
b. The after-tax incremental cash flow at the end of each year
c. The internal rate of return on the investment
d. The net present value of investment
Retired
Joined: Mar 2003
Posts: 37,967
From: .
Re: Whats up Bitches???
I'm facebook friends with my cool uncle. He was at the same bar that my high school reuinion was at and had a few beers with him. My dad just sent me an email about how my uncle showed him facebook, saw me, and said that it "looked interesting". Looks like it's time to de-frend my uncle and explain why being facebook friends with co-workers and parents is a bad idea.
I Have Too Much Free Time
Joined: Oct 2002
Posts: 16,023
From: Bangor, ME
Re: Whats up Bitches???
I'm facebook friends with my cool uncle. He was at the same bar that my high school reuinion was at and had a few beers with him. My dad just sent me an email about how my uncle showed him facebook, saw me, and said that it "looked interesting". Looks like it's time to de-frend my uncle and explain why being facebook friends with co-workers and parents is a bad idea.
Retired
Joined: Mar 2003
Posts: 37,967
From: .
Re: Whats up Bitches???
Aunts and uncles don't cause any problems because they do not feel that they have to provide parental input. I would never facebook friend my parents for the same reason I wouldn't friend a stalker ex-girlfriend. They have way too much time on their hands and would leave embarrasing comments. Unless FB provided an application where I had to approve every picture, comment, group, etc that they could see it ain't happening.
Retired
Joined: Mar 2003
Posts: 37,967
From: .
I Have Too Much Free Time
Joined: Oct 2002
Posts: 16,023
From: Bangor, ME
Re: Whats up Bitches???
I Chose to No Longer Post
Joined: Apr 2004
Posts: 37,827
Re: Whats up Bitches???
I'm facebook friends with my cool uncle. He was at the same bar that my high school reuinion was at and had a few beers with him. My dad just sent me an email about how my uncle showed him facebook, saw me, and said that it "looked interesting". Looks like it's time to de-frend my uncle and explain why being facebook friends with co-workers and parents is a bad idea.
I read an article that recommended 2 separate accounts, a friend one and a work one. My dad tried to figure it out - but theres nothing I won't do or say in front of him so that doesn't bother me. 
