# Consider the case of Alexander Industries: Alexander Industries is considering a project that…

Consider the case of Alexander Industries: Alexander Industries is considering a project that requires an investment in new equipment of \$3,570,000. Under the new tax law, the equipment is eligible for 100% bonus depreciation at t = 0 so the equipment will be fully depreciated at the time of purchase. Alexander estimates that its accounts receivable and inventories need to increase by \$680,000 to support the new project, some of which is financed by a \$272,000 increase in spontaneous liabilities (accounts payable and accruals). The company’s tax rate is 25%. a. The after-tax cost of Alexander

Consider the case of Alexander Industries: Alexander Industries is considering a project that requires an investment in new equipment of \$3,570,000. Under the new tax law, the equipment is eligible for 100% bonus depreciation at t = 0 so the equipment will be fully depreciated at the time of purchase. Alexander estimates that its accounts receivable and inventories need to increase by \$680,000 to support the new project, some of which is financed by a \$272,000 increase in spontaneous liabilities (accounts payable and accruals). The company’s tax rate is 25%. a. The after-tax cost of Alexanders new equipment is ___ .b. Alexanders initial net investment outlay is ___ . c. Suppose Alexanders new equipment is expected to sell for \$400,000 at the end of its four-year useful life, and at the same time, the firm expects to recover all of its net operating working capital (NOWC) investment. Remember, that under the new tax law, this equipment was fully depreciated at t = 0. If the firms tax rate is 25%, what is the projects total termination cash flow? \$508,000 \$400,000 \$300,000 \$708,000

## Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
\$26
The price is based on these factors:
Number of pages
Urgency
Basic features
• Free title page and bibliography
• Unlimited revisions
• Plagiarism-free guarantee
• Money-back guarantee
On-demand options
• Writer’s samples
• Part-by-part delivery
• Overnight delivery
• Copies of used sources
Paper format
• 275 words per page
• 12 pt Arial/Times New Roman
• Double line spacing
• Any citation style (APA, MLA, Chicago/Turabian, Harvard)

# Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

### Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

### Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

### Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.