Annual depreciation=(Cost-Salvage value)/Useful Life
=(2,100,000/3)=$700,000/year
OCF=(Sales-Costs)(1-tax rate)+Tax savings on Annual depreciation
=(2,150,000-1,311,236)(1-0.35)+(0.35*700,000)
=790196.60
Cochrane. Inc, is considering a new three-year expansion project that requires an initial fixed asset investment...
Cochrane. Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2.1 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $2.150.000 in annual sales, with costs of $1.311.236. Required: If the tax rate is 35 percent, what is the OCF for this project? (Do not include the dollar sign ($). Enter your answer in...
Cochrane, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2.1 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $2,150,000 in annual sales, with costs of $1,078,327. Required: If the tax rate is 35 percent, what is the OCF for this project? (Do not include the dollar sign ($). Enter your answer in...
1) Cochrane, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2,370,000. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $2,240,000 in annual sales, with costs of $1,230,000. Required: If the tax rate is 35 percent, what is the OCF for this project? (Do not round intermediate calculations. Enter your answer in dollars, not...
Cochrane, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2,610,000. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $2,320,000 in annual sales, with costs of $1,310,000. Required: If the tax rate is 40 percent, what is the OCF for this project? (Do not round intermediate calculations. Enter your answer in dollars, not millions...
Cochrane, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2.1 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $2,150,000 in annual sales, with costs of $1,140,000. Assume the tax rate is 35 percent and the required return on the project is 14 percent. WHAT IS THE PROJECTS NPV?
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Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.28 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $1,648,000 in annual sales, with costs of $627,000. If the tax rate is 22 percent, what is the OCF for this project? (Do not round intermediate calculations and enter your answer in dollars, not...