Cash flows

Mars Inc. is considering the purchase of a new machine that will reduce manufacturing costs by $5,000 annually. Mars will use the MACRS accelerated method to depreciate the machine, and it expects to sell the machine at the end of its 5-year operating life for $10,000. The firm expects to be able to reduce net operating working capital by $15,000 when the machine is installed, but required net operating working capital will return to its original level when the machine is sold after 5 years. MarsAfA?A??cAf?cAc€A!A?¬Af?cAc€A3A??c marginal tax rate is 40%, and it uses a 12% WACC to evaluate projects of this nature. The applicable depreciation rates are 20%, 32%, 19%, 12%, 11%, and 6%. If the machine costs $60,000, What is the cash flows at t=0

 

Looking for a Similar Assignment? Hire our Top Techical Tutors while you enjoy your free time! All papers are written from scratch and are 100% Original. Try us today! Active Discount Code FREE15