Lasalle Industries is considering the purchase of a new machine that will cost $250,000, plus an
additional $10,000 to ship and install. The new machine will have a 5-year useful life and will be
depreciated to zero using the straight-line method.
The machine is expected to have a salvage
value of $30,000 at the end of year five. LaSalle's income tax rate is 40%. The additional net working
capital from this project of $50,000 is expected to return to its pre-project level upon termination.
What is the non-operating terminal cash flow of the machine?
A) $68,000 B) -$32,000 C) $48,000 D) $80,000
A
You might also like to view...
In the 1950s concept of the 12 categories of a marketing mix, ________ involved decisions about how to move a product from manufacturer to consumer
A) channels of distribution B) product planning C) physical handling D) servicing E) packaging
The cost of retained earnings is the cost of issuing new common stock without flotation costs
Indicate whether the statement is true or false.