provide a benefit of $30. In 5 years, there will be no salvage value for the equipment. T company's combined marginal tax rate is 30%. Based on 18% after-tax MARR, how mar uses of the equipment must the company have each year in order to justify its investment? Question 5 Part G: What is the correct break-even equation setup? -250000(A/P, 18%, 5) +59800+21X=0 -250000(P/A, 18%, 5) +9800-21X=0 -250000(P/A, 18%, 5) +59800+39X=0 -250000(A/P, 18%, 5) +59800+39X=0

provide a benefit of $30. In 5 years, there will be no salvage value for the equipment. T company's combined marginal tax rate is 30%. Based on 18% after-tax MARR, how mar uses of the equipment must the company have each year in order to justify its investment? Question 5 Part G: What is the correct break-even equation setup? -250000(A/P, 18%, 5) +59800+21X=0 -250000(P/A, 18%, 5) +9800-21X=0 -250000(P/A, 18%, 5) +59800+39X=0 -250000(A/P, 18%, 5) +59800+39X=0

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter11: Cash Flow Estimation And Risk Analysis

Section: Chapter Questions

Problem 1P: Talbot Industries is considering launching a new product. The new manufacturing equipment will cost...

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Talbot Industries is considering launching a new product. The new manufacturing equipment will cost $17 million, and production and sales will require an initial $5 million investment in net operating working capital. The company’s tax rate is 25%. What is the initial investment outlay? The company spent and expensed $150,000 on research related to the new product last year. What is the initial investment outlay? Rather than build a new manufacturing facility, the company plans to install the equipment in a building it owns but is not now using. The building could be sold for $1.5 million after taxes and real estate commissions. What is the initial investment outlay?
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Talbot Industries is considering launching a new product. The new manufacturing equipment will cost 17 million, and production and sales will require an initial 5 million investment in net operating working capital. The companys tax rate is 40%. a. What is the initial investment outlay? b. The company spent and expensed 150,000 on research related to the new product last year. Would this change your answer? Explain. c. Rather than build a new manufacturing facility, the company plans to install the equipment in a building it owns but is not now using. The building could be sold for 1.5 million after taxes and real estate commissions. How would this affect your answer?