Order the answer to: The profitable Palmer Golf Cart Corp

Custom Essays business-economics Order the answer to: The profitable Palmer Golf Cart Corp

business-economics

Order the answer to: The profitable Palmer Golf Cart Corp

Question The profitable Palmer Golf Cart Corp. is considering investing $300,000 in special tools for some of the plastic golf cart components. Executives of the company believe the present golf cart model will continue to be manufactured and sold for 5 years, after which a new cart design will be needed, together with a different set of special tools. The saving in manufacturing costs, owing to the special tools, is estimated to be $150,000 per year for 5 years. Assume MACRS for the special tools and a 39% income tax rate. (a) What is the after-tax for this investment? (b) If the company wants a 12% after-tax rate of return, is this a desirable investment?
Subject business-economics
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