Homework Answers
| Sales | 580000 |
| Less: Variable costs | 464000 |
| Fixed costs | 120000 |
| EBITDA | -4000 |
| Less: Depreciation equipment | 3200 |
| Depreciation Plant | 2666.67 |
| EBIT | -9866.67 |
| Less: Tax | -2960 |
| Profit After tax | -6906.67 |
| OCF | -3706.67 |
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What is the annual operating cash flow (OCF) for a 10-year project that has annual sales...
answer questions Previous Page Next Page Page 3 Question 4 (6 points) Eastern Inc. purchases a machine for $70,000....
answer questions
Previous Page Next Page Page 3 Question 4 (6 points) Eastern Inc. purchases a machine for $70,000. This machine qualifies as a five-year recovery asset under MACRS with the fixed depreciation percentages as follows: year 1 = 20.00%; year 2 = 32.00%; year 3 = 19.20%; year 4 = 11.52%. The firm has a tax rate of 40%. If the machine is sold at the end of two years for $50,000, what is the cash flow from disposal(termination...
*First, what is the annual operating cash flow of the project for year 1? *What is the annual operating cash flow of...
*First, what is the annual operating cash flow of the project
for year 1?
*What is the annual operating cash flow of the project for
year 2?
*What is the annual operating cash flow of the project for
year 3?
*What is the annual operating cash flow of the project for
year 4?
*What is the annual operating cash flow of the project for
year 5?
*Next, what is the after-tax cash flow of the equipment at
disposal?
*Then, what...
1: What is the operating cash flow for this project for the first five years of the 10-year period?? 2: for the last...
1: What is the operating cash flow for this project for the
first five years of the 10-year period??
2: for the last five years of the 10-year period?
3: What is the book value?
4: Calculate the gain or loss at disposal of the manufacturing
equipment.
5: What is the after-tax cash flow at disposal?
6: What is the net present value?
NPV, Migliotti Restaurants is looking at a project with the following forecasted sales: first-year sales quantity of...
Use the following information to answer the 8 questions (filling in the blanks) that follow it....
Use the following information to answer the 8 questions (filling in the blanks) that follow it. When answering the questions, DO NOT use dollar signs, USE commas to separate thousands, DO NOT use parenthesis to denote negative numbers, USE the negative sign and place it in front of first digit of your answer when your answer is a negative number. Round to the nearest dollar (do not enter decimals). For example, if your answer is -$1,245,300.40 then enter -1,245,300 RET...
AAA Corp. currently has one product, high-priced lawn mowers. AAA Corp. has decided to sell a...
AAA Corp. currently has one product, high-priced lawn mowers. AAA Corp. has decided to sell a new line of medium-priced lawn mowers. The building and machinery for producing this new line is estimated to cost $11,000,000 and it will be depreciated down to zero over 20 years using straight-line depreciation. Also, an investment today on working capital in the amount of $4,000,000 is needed. The working capital will be recovered at the end of the project. Sales for the new...
*First, what is the annual operating cash flow of the project for year 1? *What is...
*First, what is the annual operating cash flow of the project
for year 1?
*What is the annual operating cash flow of the project for
year 2?
*What is the annual operating cash flow of the project for
year 3?
*What is the annual operating cash flow of the project for
year 4?
*What is the annual operating cash flow of the project for
year 5?
*Next, what is the after-tax cash flow of the equipment at
disposal?
*Then, what...
Problem 10-9 Calculating Project OCF [LO1] Keiper, Inc., is considering a new three-year expansion project that...
Problem 10-9 Calculating Project OCF [LO1] Keiper, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2.40 million. The fixed asset will be depreciated straight-ine to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $1,980,000 in annual sales, with costs of $675,000. If the tax rate is 34 percent, what is the OCF for this project? (Enter your answer in dollars, not...
Based on the following information, what is the relevant operating cash flow (OCF) associated with the project expected...
Based on the following information, what is the relevant operating cash flow (OCF) associated with the project expected to be in year 3? The project would require an initial investment in equipment of 650,000 dollars that would be depreciated using MACRS where the depreciation rates in years 1, 2, 3, and 4 are 38 percent, 24 percent, 24 percent, and 14 percent, respectively. At the end of the project in 3 years, the equipment would be sold for an expected...
Based on the following information, what is the relevant operating cash flow (OCF) associated with the project expected...
Based on the following information, what is the relevant operating cash flow (OCF) associated with the project expected to be in year 2? The project would require an initial investment in equipment of 650,000 dollars that would be depreciated using MACRS where the depreciation rates in years 1, 2, 3, and 4 are 41 percent, 24 percent, 24 percent, and 11 percent, respectively. At the end of the project in 2 years, the equipment would be sold for an expected...
MC algo 11-1 Best Case OCF A project with a life of 7 years is expected...
MC algo 11-1 Best Case OCF A project with a life of 7 years is expected to provide annual sales of $350,000 and costs of $245,000. The project will require an investment in equipment of $625,000, which will be depreciated on a straight- line method over the life of the project. You feel that both sales and costs are accurate to +/10 percent. The tax rate is 35 percent. What is the annual operating cash flow for the best-case scenario?
answer questions
Previous Page Next Page Page 3 Question 4 (6 points) Eastern Inc. purchases a machine for $70,000. This machine qualifies as a five-year recovery asset under MACRS with the fixed depreciation percentages as follows: year 1 = 20.00%; year 2 = 32.00%; year 3 = 19.20%; year 4 = 11.52%. The firm has a tax rate of 40%. If the machine is sold at the end of two years for $50,000, what is the cash flow from disposal(termination...
*First, what is the annual operating cash flow of the project
for year 1?
*What is the annual operating cash flow of the project for
year 2?
*What is the annual operating cash flow of the project for
year 3?
*What is the annual operating cash flow of the project for
year 4?
*What is the annual operating cash flow of the project for
year 5?
*Next, what is the after-tax cash flow of the equipment at
disposal?
*Then, what...
1: What is the operating cash flow for this project for the
first five years of the 10-year period??
2: for the last five years of the 10-year period?
3: What is the book value?
4: Calculate the gain or loss at disposal of the manufacturing
equipment.
5: What is the after-tax cash flow at disposal?
6: What is the net present value?
NPV, Migliotti Restaurants is looking at a project with the following forecasted sales: first-year sales quantity of...
AAA Corp. currently has one product, high-priced lawn mowers. AAA Corp. has decided to sell a new line of medium-priced lawn mowers. The building and machinery for producing this new line is estimated to cost $11,000,000 and it will be depreciated down to zero over 20 years using straight-line depreciation. Also, an investment today on working capital in the amount of $4,000,000 is needed. The working capital will be recovered at the end of the project. Sales for the new...
*First, what is the annual operating cash flow of the project
for year 1?
*What is the annual operating cash flow of the project for
year 2?
*What is the annual operating cash flow of the project for
year 3?
*What is the annual operating cash flow of the project for
year 4?
*What is the annual operating cash flow of the project for
year 5?
*Next, what is the after-tax cash flow of the equipment at
disposal?
*Then, what...
Problem 10-9 Calculating Project OCF [LO1] Keiper, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2.40 million. The fixed asset will be depreciated straight-ine to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $1,980,000 in annual sales, with costs of $675,000. If the tax rate is 34 percent, what is the OCF for this project? (Enter your answer in dollars, not...
MC algo 11-1 Best Case OCF A project with a life of 7 years is expected to provide annual sales of $350,000 and costs of $245,000. The project will require an investment in equipment of $625,000, which will be depreciated on a straight- line method over the life of the project. You feel that both sales and costs are accurate to +/10 percent. The tax rate is 35 percent. What is the annual operating cash flow for the best-case scenario?
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