Question

In working on a bid project you have determined that $318,000 of fixed assets will be...

In working on a bid project you have determined that $318,000 of fixed assets will be required and that they will be depreciated straight-line to zero over the 6-year life of the project. You have also determined that the discount rate should be 18 percent and the tax rate will be 35 percent. In addition, the annual cash costs will be $198,200. After considering all of the project’s cash flows you have determined that the required operating cash flow is $92,400. What is the amount of annual sales revenue that is required?

$299,811.17

$302,006.64

$284,849,92

$311,815.38

$279,407.72

0 0
Add a comment Improve this question Transcribed image text
Request Professional Answer

Request Answer!

We need at least 10 more requests to produce the answer.

0 / 10 have requested this problem solution

The more requests, the faster the answer.

Request! (Login Required)


All students who have requested the answer will be notified once they are available.
Know the answer?
Add Answer to:
In working on a bid project you have determined that $318,000 of fixed assets will be...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Similar Homework Help Questions
  • In working on a bid for project you have determined that $245,000 of fixed assets will...

    In working on a bid for project you have determined that $245,000 of fixed assets will be required and that they will be depreciated straight-line to zero over the 5-year life of the project, and you can get $23,200 for these fixed assets at the end of 5 years. You will also need to increase net working capital by 15,000 initially and recoup the investment in net working capital at the end of the project. You have also determined that...

  • Summer Tyme, inc., is considering a new three year expansion project that requires an initial fixed...

    Summer Tyme, inc., is considering a new three year expansion project that requires an initial fixed asset investment of $3.9 million. The fixed asset will be depreciated straight line to zero over the life of the project, after which time it will be worthless. The project is estimated to generate $2650000 in annual sales, with costs of $840000 and a tax rate of 35 percent. The required return on the project is 12 percent. a) What is the operating cash...

  • You are working on a bid for a contract. Thus far, you have determined that you...

    You are working on a bid for a contract. Thus far, you have determined that you will need $156,000 for fixed assets and another $32,000 for net working capital at Time 0. You have also determined that you can recover $68,400 after-tax for the combined fixed assets and net working capital at the end of the 4-year project. What must be the annual operating cash flow each year, if the IRR of the project is 16 percent ? Select one:...

  • H. Cochran, Inc., is considering a new three-year expansion project that requires an initial fixed asset...

    H. Cochran, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2,550,000. The fixed asset will be depreciated straight-line to zero over its three-year tax life. The project is estimated to generate $2,300,000 in annual sales, with costs of $1,290,000. The project requires an initial investment in net working capital of $165,000, and the fixed asset will have a market value of $190,000 at the end of the project. Assume that the tax...

  • Cochrane, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $...

    Cochrane, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $1,860,000. 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 $1,950,000 in annual sales, with costs of $1,060,000. The project requires an initial investment in net working capital of $150,000, and the fixed asset will have a market value of $175,000 at the end of...

  • You are working on a bid to build two city parks a year for the next...

    You are working on a bid to build two city parks a year for the next three years. This project requires the purchase of $273,000 of equipment that will be depreciated using straight-line depreciation to a zero book value over the three-year project life. Ignore bonus depreciation. The equipment can be sold at the end of the project for half of what you paid for it. You will also need $23,000 in net working capital for the duration of the...

  • You are working on a bid to build two city parks a year for the next...

    You are working on a bid to build two city parks a year for the next three years. This project requires the purchase of $210,000 of equipment that will be depreciated using straight-line depreciation to a zero book value over the 3-year project life. The equipment can be sold at the end of the project for $34,000. You will also need $21,000 in net working capital for the duration of the project: all net working capital will be recovered at...

  • AAA Corp. is reviewing a new three-year project requiring an initial fixed asset investment of $2.1...

    AAA Corp. is reviewing a new three-year project requiring an initial fixed asset investment of $2.1 million. The fixed asset will be depreciated straight-line to zero over the investment horizon. The project is estimated to generate $2,100,000 in annual sales, with costs of $1,100,000. The current marginal tax rate is 30% and the required rate of return is 10%. You need to display your cash flow model by manually or using the Excel program that must be submitted separately in...

  • Down Under Boomerang, Inc., is considering a new 3-year expansion project that requires an initial fixed...

    Down Under Boomerang, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $2.37 million. The fixed asset will be depreciated straight-line to zero over its 3-year tax life. The project is estimated to generate $1,780,000 in annual sales, with costs of $690,000. The project requires an initial investment in net working capital of $390,000, and the fixed asset will have a market value of $390,000 at the end of the project. a. If...

  • Down Under Boomerang, Inc., is considering a new 3-year expansion project that requires an initial fixed...

    Down Under Boomerang, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $2.29 million. The fixed asset will be depreciated straight-line to zero over its 3-year tax life. The project is estimated to generate $1,715,000 in annual sales, with costs of $625,000. The project requires an initial investment in net working capital of $260,000, and the fixed asset will have a market value of $195,000 at the end of the project. a. If...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT