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5) Your Company is considering a new project that will require $960,000 of new equipment...

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Finance

5) Your Company is considering a new project that will require $960,000 of new equipment at the start of the project. The equipment will have a depreciable life of 8 years and will be depreciated to a book value of $372,000 using straight-line depreciation. The cost of capital is 11%, and the firm's tax rate is 34%. Estimate the present value of the tax benefits from depreciation (closest to).

A) $48,510 B) $24,990 C) $128,602 D) $73,500

6) Your firm needs a machine which costs $200,000, and requires $35,000 in maintenance for each year of its 5 year life. After 3 years, this machine will be replaced. The machine falls into the MACRS 5-year class life category. Assume a tax rate of 30% and a discount rate of 14%. If this machine can be sold for $20,000 at the end of year 5, what is the after tax salvage value?

A) $14,000.00 B) $17,456.00 C) $8,064 D) $8,480.00

14) Scribble, Inc. has sales of $91,000 and cost of goods sold of $75,000. The firm had a beginning inventory of $21,000 and an ending inventory of $23,000. What is the length of the days' sales in inventory? (Round your answer to 2 decimal places.)

A) 84.23 days B) 102.20 days C) 111.93 days D) 92.25 days

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