Your Firm Needs a Computerized Machine Tool Lathe That Costs

question 110

Multiple Choice

Your firm needs a computerized machine tool lathe that costs $50,000, requires $10,000 in installation, $5,000 in freight charges, and another $12,000 in maintenance for each year of its three-year life. After three years, this machine will be replaced. The machine falls into the MACRS three-year class life category. Assume a tax rate of 30 percent and a discount rate of 12 percent. If the lathe can be sold for $7,000 at the end of year 3, what is the after-tax salvage value?

• A)$6,499.35
• B)$6,344.95
• C)$5,999.45
• D)$6,554.95

Comprehend the process, costs, and effects of bankruptcy proceedings on different stakeholders.

Identify the requirements and effects of environmental impact statements on federal actions.

Understand the framework and implications of Chapter 11 bankruptcy for businesses.

Recognize the role of mediation and out-of-court negotiations in resolving debts.

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Definitions:

Dividend Yield Ratio

A financial ratio that shows how much a company pays out in dividends each year relative to its share price.

Par Value

A nominal value assigned to a security or stock as stated in the corporate charter.

Dividend Payout Ratio

This is a financial ratio that measures the percentage of earnings paid to shareholders in the form of dividends.

Net Income

The total profit or loss of a company after all revenues, costs, expenses, and taxes have been accounted for.