A corporation is evaluating the relevant cash flows for a capital budgeting decision and must estimate the terminal cash flow. The proposed machine will be disposed of at the end of its usable life of five years at an estimated sale price of $15,000. The machine has an original purchase price of $80,000, installation cost of $20,000, and will be depreciated under the five-year MACRS. Net working capital is expected to decline by $5,000. The firm has a 40 percent tax rate on ordinary income and long-term capital gain. The terminal cash flow is ________.
A) $24,000
B) $16,000
C) $14,000
D) $26,000
B) $16,000
You might also like to view...
Which of the following statements relating to insurance companies is correct?
a. Under GAAP, the balance sheet of an insurance company is classified by current assets and current liabilities. b. The largest liability on the balance sheet is generally unearned premiums. c. Under statutory accounting practices, real estate, not used in operations, is valued at market value on the balance sheet. d. For long-duration contracts, revenue is recognized when the premium is due from the policyholder.
A properly executed subsequent will revokes a prior will
Indicate whether the statement is true or false
A holographic will must be in writing
Indicate whether the statement is true or false
Which of the following traits is NOT currently protected under Title VII?
a. National origin b. Sexual orientation (homosexual vs. heterosexual) c. Gender (male vs. female) d. Family responsibility (mothers vs. fathers)