Homework Answers
Annual Operating Cash Flow for the Best-Case Scenario
Annual Sales = $385,000 [$350,000 x 110%]
Annual Costs = $220,500 [$245,000 x 90%]
Depreciation Expense = $89,285.71 per year [$625,000 / 7 Years]
Annual Operating Cash Flow = [(Annual Sales - Costs) x (1 – Tax Rate)] + [Depreciation x Tax Rate]
= [($385,000 - $220,500) x (1 – 0.35)] + [$89,285.71 x 0.35]
= [$164,500 x 0.65] + [$89,285.71 x 0.35]
= $106,925 + $31,250
= $138,175
“Hence, the annual operating cash flow for the best-case scenario would be $138,175”
Add Answer to:
MC algo 11-1 Best Case OCF A project with a life of 7 years is expected...
A project with a life of 8 years is expected to provide annual sales of $360,000...
A project with a life of 8 years is expected to provide annual sales of $360,000 and costs of $253,000. The project will require an investment in equipment of $640,000, 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 +/-15 percent. The tax rate is 40 percent. What is the annual operating cash flow for the best-case scenario?
A7-year project is expected to provide annual sales of $221000 with costs of $97,500. The equipment necessary for t...
A7-year project is expected to provide annual sales of $221000 with costs of $97,500. The equipment necessary for the project will cost $360,000 and will be depreciated on a straight-line method over the life of the project. You feel that both sales and costs are accurate to +-15 percent. The tax rate is 35 percent. What is the annual operating cash flow for the worst case scenario?
A 9-year project is expected to provide annual sales of $241,000 with costs of $100,000. The...
A 9-year project is expected to provide annual sales of $241,000 with costs of $100,000. The equipment necessary for the project will cost $385,000 and 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 worst-case scenario? Multiple Choice Ο S69,485 Ο $76,257 Ο $128,787 Ο S52,387 Ο S84,457
A 6-year project is expected to provide annual sales of $229,000 with costs of $98,500. The...
A 6-year project is expected to provide annual sales of $229,000 with costs of $98,500. The equipment necessary for the project will cost $370,000 and will be depreciated on a straight-line method over the life of the project. You feel that both sales and costs are accurate to +/-15 percent. The tax rate is 34 percent. What is the annual operating cash flow for the worst-case scenario?
A 9-year project is expected to provide annual sales of $157,000 with costs of $84,000. The...
A 9-year project is expected to provide annual sales of $157,000 with costs of $84,000. The equipment necessary for the project will cost $370,000 and 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 40 percent. What is the annual operating cash flow for the worst-case scenario?
We are evaluating a project that costs $1,710,000, has a life of 6 years, and has...
We are evaluating a project that costs $1,710,000, has a life of 6 years, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 86,400 units per year. Price per unit is $38.01, variable cost per unit is $23.25, and fixed costs are $818,000 per year. The tax rate is 21 percent, and we require a return of 9 percent on this project. Suppose the projections given for...
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...
1. We are evaluating a project that costs $864,000, has an eight-year life, and has no...
1. We are evaluating a project that costs $864,000, has an eight-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 71,000 units per year. Price per unit is $49, variable cost per unit is $33, and fixed costs are $765,000 per year. The tax rate is 35 percent, and we require a return of 10 percent on this project. a. Calculate the accounting break-even point....
We are evaluating a project that costs $2,040,000, has a 7-year life, and has no salvage...
We are evaluating a project that costs $2,040,000, has a 7-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 89,700 units per year. Price per unit is $38.67, variable cost per unit is $23.80, and fixed costs are $851,000 per year. The tax rate is 22 percent, and we require a return of 10 percent on this project. a. Calculate the base-case operating cash flow...
P10-9 Calculating Project OCF (LO1] Summer Tyme, Inc., is considering a new 2-year expansion project that...
P10-9 Calculating Project OCF (LO1] Summer Tyme, Inc., is considering a new 2-year expansion project that requires an initial fixed asset investment of $6.372 million. The fixed asset will be depreciated straight-line to zero over its 2-year tax life, after which time it will be worthless. The project is estimated to generate $5,664,000 in annual sales, with costs of $2,265,600. Required: If the tax rate is 33 percent, what is the OCF for this project?
A7-year project is expected to provide annual sales of $221000 with costs of $97,500. The equipment necessary for the project will cost $360,000 and will be depreciated on a straight-line method over the life of the project. You feel that both sales and costs are accurate to +-15 percent. The tax rate is 35 percent. What is the annual operating cash flow for the worst case scenario?
A 9-year project is expected to provide annual sales of $241,000 with costs of $100,000. The equipment necessary for the project will cost $385,000 and 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 worst-case scenario? Multiple Choice Ο S69,485 Ο $76,257 Ο $128,787 Ο S52,387 Ο S84,457
A 6-year project is expected to provide annual sales of $229,000 with costs of $98,500. The equipment necessary for the project will cost $370,000 and will be depreciated on a straight-line method over the life of the project. You feel that both sales and costs are accurate to +/-15 percent. The tax rate is 34 percent. What is the annual operating cash flow for the worst-case scenario?
We are evaluating a project that costs $1,710,000, has a life of 6 years, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 86,400 units per year. Price per unit is $38.01, variable cost per unit is $23.25, and fixed costs are $818,000 per year. The tax rate is 21 percent, and we require a return of 9 percent on this project. Suppose the projections given for...
P10-9 Calculating Project OCF (LO1] Summer Tyme, Inc., is considering a new 2-year expansion project that requires an initial fixed asset investment of $6.372 million. The fixed asset will be depreciated straight-line to zero over its 2-year tax life, after which time it will be worthless. The project is estimated to generate $5,664,000 in annual sales, with costs of $2,265,600. Required: If the tax rate is 33 percent, what is the OCF for this project?
Most questions answered within 3 hours.
-
A university administrator working in student housing wants to
determine if the percentage of students residing...
asked 7 minutes ago -
3). Describe human population growth that has occurred in the
past 400 years. Use terms learned...
asked 4 minutes ago -
A
projectile is blue at a target. The distance from the point of
impact to the...
asked 28 minutes ago -
Given a 32 bit processor, with 2 MB of physical RAM split into 512
frames. What...
asked 19 minutes ago -
What were the main rulings in the Supreme Court cases which are
Morgan v. Virginia (1946)...
asked 18 minutes ago -
write a five paragraph essay on how setting,
specifically culture, influences the actions of
the characters...
asked 10 minutes ago -
JAVA
Provide a simple code sample of Merge sort
asked 20 minutes ago -
Discounting cash flows involves:
A. taking the cash discount offered on a trade merchandise
B. estimating...
asked 28 minutes ago -
A solid wood door 1.00 m wide and 2.00 m high is hinged along
one side...
asked 28 minutes ago -
Raleigh Company manufactures two joint products. At the
split-off point, they have sales values of:
Product...
asked 27 minutes ago -
1. Your grandmother has invested $4000 in a mutual fund each
year on your birthday (she...
asked 29 minutes ago -
HELP WITH SAS
Run the following DATA step to create a SAS data set called
ABC_CORP....
asked 42 minutes ago