Order the answer to: A profitable wood products corporation

Custom Essays business-economics Order the answer to: A profitable wood products corporation

business-economics

Order the answer to: A profitable wood products corporation

Question A profitable wood products is considering buying a parcel of land for $50,000, building a small factory building at a cost of $200,000, and equipping it with $150,000 of MACRS 5-year class machinery. If the project is undertaken, MACRS will be used. Assume the plant is put in service October 1.The before-tax net annual benefit from the project is estimated at $70,000 per year. The analysis period is to be 5 years, and planners assume the sale of the total property (land, building, and machinery) at the end of 5 years, also on October 1, for $328,000. Compute the after-tax cash flow based on a 34% income tax rate. If the corporation’s criterion is a 15% after-tax rate of return, should it proceed- with the project?
Subject business-economics
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