Cash estimations for a capital expenditure analysis
Not what you're looking for?
Determine (quantify) how much, if any, costs should be included in cash estimations for a capital expenditure analysis for the following situations. Explain your answers. EACH SITUATION IS INDEPENDENT OF THE OTHERS. If you can, use Excel spreadsheet to show the formula.
Problem 1:
Keystone Cops, a consulting firm, is assisting in a capital spending project. They have billed $50,000 so far, and if this project is approved billings during its 3 year life will be $25,000 per year.
Problem 2:
If approved, a $1,000,000 capital project will be financed with 50% debt at an annual interest rate of 10%. The company's tax rate is 40%.
Problem 3:
A presently owned but unused building would be used for a capital project having an 8 year life. The building has a book value of $2,400,000 with an 8 year remaining depreciable life, and it has an immediate sale value to a third party of $3,000,000. The company tax rate is 40% and it uses straight line depreciation for both taxes and book accounting.
Purchase this Solution
Solution Summary
Cash estimations for a capital expenditure analysis is examined.
Purchase this Solution
Free BrainMass Quizzes
Understanding the Accounting Equation
These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.
Employee Orientation
Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.
MS Word 2010-Tricky Features
These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.
Six Sigma for Process Improvement
A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.
Organizational Leadership Quiz
This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.