You must evaluate the purchase of a proposed spectrometer for the r& d department. the base price is $90,000, and it would cost another $13,500 to modify the equipment for special use by the firm. the equipment falls into the macrs 3-year class and would be sold after 3 years for $36,000. the applicable depreciation rates are 33%, 45%, 15%, and 7%. the equipment would require a $5,000 increase in net operating working capital (spare parts inventory). the project would have no effect on revenues, but it should save the firm $47,000 per year in before-tax labor costs. the firm's marginal federal-plus-state tax rate is 40%.

what is the initial investment outlay for the spectrometer, that is, what is the year 0 project cash flow? round your answer to the nearest cent. negative amount should be indicated by a minus sign. $

what are the project's annual cash flows in years 1, 2, and 3? round your answers to the nearest cent.

in year 1 $
in year 2 $
in year 3 $

if the wacc is 14%, should the spectrometer be purchased?

Anew equipment has been proposed by engineers to increase the productivity of a certain manual welding operation. the investment cost is $25,000, and the equipment will have a market value of $5,000 at the end of a study period of five years. increased productivity attributable to the equipment will amount to $10,000 per year after operating costs have been subtracted from the revenue generated by the additional production. if marr is 10%, is investing in this equipment feasible? use annual worth method.

You have just been hired as a financial analyst for barrington industries. unfortunately, company headquarters (where all of the firm's records are kept) has been destroyed by fire. so, your first job will be to recreate the firm's cash flow statement for the year just ended. the firm had $100,000 in the bank at the end of the prior year, and its working capital accounts except cash remained constant during the year. it earned $5 million in net income during the year but paid $800,000 in dividends to common shareholders. throughout the year, the firm purchased $5.5 million of machinery that was needed for a new project. you have just spoken to the firm's accountants and learned that annual depreciation expense for the year is $450,000; however, the purchase price for the machinery represents additions to property, plant, and equipment before depreciation. finally, you have determined that the only financing done by the firm was to issue long-term debt of $1 million at a 6% interest rate. what was the firm's end- of-year cash balance? recreate the firm's cash flow statement to arrive at your answer

University car wash built a deluxe car wash across the street from campus. the new machines cost $219,000 including installation. the company estimates that the equipment will have a residual value of $19,500. university car wash also estimates it will use the machine for six years or about 12,500 total hours. actual use per year was as follows: year hours used 1 3,100 2 1,100 3 1,200 4 2,800 5 2,600 6 1,200 prepare a depreciation schedule for six years using the following methods: 1. straight-line. 2. double-declining-balance. 3. activity-based.