2 Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed...
Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $2.43 million. The fixed asset will be depreciated straight-line to zero over its 3-year tax life, after which time it will have a market value (salvage value) of $189,000. The project requires an initial investment in networking capital of $270,000. The project is estimated to generate $2,160,000 in annual sales, with costs of $864,000. The tax rate is 34 percent and the...
Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $4.644 million. The fixed asset will be depreciated straight-line to zero over its 3-year tax life, after which time it will have a market value of $361,200. The project requires an initial investment in net working capital of $516,000. The project is estimated to generate $4,128,000 in annual sales, with costs of $1,651,200. The tax rate is 32 percent and the required...
Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $6.3 million. The fixed asset falls into the 3-year MACRS class (MACRS Table) and will have a market value of $491,400 after 3 years. The project requires an initial investment in net working capital of $702,000. The project is estimated to generate $5,616,000 in annual sales, with costs of $2,246,400. The tax rate is 33 percent and the required return on the...
Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $6.2 million. The fixed asset falls into the 3-year MACRS class (MACRS Table) and will have a market value of $478,800 after 3 years. The project requires an initial investment in net working capital of $684,000. The project is estimated to generate $5,472,000 in annual sales, with costs of $2,188,800. The tax rate is 30 percent and the required return on the...
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...
Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $871000. The fixed asset will be depreciated straight-line to 75000 over its 3-year tax life, after which time it will have a market value of $89000. The project requires an initial investment in net working capital of $48000. The project is estimated to generate $193000 in annual sales, with costs of $105000. The tax rate is 0.21 and the required return on...
P10-11 Calculating Project Cash Flow from Assets [LO Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $5.724 million. The fixed asset will be depreciated straight-line to zero over its 3-year tax life, after which time it will have a market value (salvage value) of $445,200. The project requires an initial investment in net working capital of $636,000. The project is estimated to generate $5,088,000 in annual sales, with costs of...
Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $4.698 million. The fixed asset will be depreciated straight-line to zero over its 3-year tax life, after which time it will be worthless. The project is estimated to generate $4,176,000 in annual sales, with costs of $1,670,400. Required: If the tax rate is 35 percent, what is the OCF for this project? rev: 09_18_2012 $2,176,740 $610,740 $2,505,600 $2,067,903 $2,285,577 Dog Up! Franks...
Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $776,723. The fixed asset will be depreciated straight-line to 63,696 over its 3-year tax life, after which time it will have a market value of $105,666. The project requires an initial investment in net working capital of $75,981. The project is estimated to generate $257,580 in annual sales, with costs of $140,739. The tax rate is 0.32 and the required return on...
Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $2279000. The fixed asset will be depreciated straight-line to zero over its 3-year tax life, after which time it will be worthless. The project is estimated to generate $2330000 in annual sales, with costs of $1645000. If the tax rate is 0.26 , what is the OCF for this project?