A gym owner is considering opening a location on the other side of town. The new facility will cost $1.39 million and will be depreciated on a straight-line basis over a 20-year period. The new gym is expected to generate $543,000 in annual sales. Variable costs are 53 percent of sales, the annual fixed costs are $87,300, and the tax rate is 35 percent. What is the operating cash flow?
Operating cash flow = (Sales - Variable cosrs - Fixed costs)(1 - Tax rate) + Tax rate(Depreciation)
Operating cash flow = [$543,000 − (0.53 * $543,000) − $87,300](1 − 0.35) + 0.35($1,390,000/20)
Operating cash flow = $133,466.50
A gym owner is considering opening a location on the other side of town. The new...
A gym owner is considering opening a location on the other side of town. The new facility will cost $1.48 million and will be depreciated on a straight-line basis over a 20-year period. The new gym is expected to generate $561,000 in annual sales. Variable costs are 48 percent of sales, the annual fixed costs are $90,900, and the tax rate is 35 percent. What is the operating cash flow?
A gym owner is considering opening a location on the other side of town. The new facility will cost $1.38 million and will be depreciated on a straight-line basis over a 20-year period. The new gym is expected to generate $541,000 in annual sales. Variable costs are 52 percent of sales, the annual fixed costs are $86,900, and the tax rate is 34 percent. What is the operating cash flow?
Modern Designs Ltd. is considering opening up a new store in Perth. The store will have a life of 25 years. It will generate annual sales of 4,700 machines, and the price of each machine is $3,500. The annual sales of spare parts will be $655,000 and the operating expenses of the store, including labour & rent, will amount to 35% of the revenues from machines. The initial investment in the store will equal $20 million & will be fully...
Modern Designs Ltd. is considering opening up a new store in Perth. The store will have a life of 25 years. It will generate annual sales of 4,700 machines, and the price of each machine is $3,500. The annual sales of spare parts will be $655,000 and the operating expenses of the store, including labour & rent, will amount to 35% of the revenues from machines. The initial investment in the store will equal $20 million & will be fully...
Organic Produce is considering a new 6-year expansion project that requires an initial fixed asset investment of $5.876 million. The fixed asset will be depreciated straight-line to zero over its 6-year tax life, after which time it will be worthless. The project is estimated to generate $5,328,000 in annual sales, with costs of $2,131,200. The tax rate is 32 percent. What is the annual operating cash flow for this project?
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...
Phone Home, Inc. is considering a new 6-year expansion project that requires an initial fixed asset investment of $5.876 million. The fixed asset will be depreciated straight-line to zero over its 6-year tax life, after which time it will be worthless. The project is estimated to generate $5,328,000 in annual sales, with costs of $1,831,200. The tax rate is 32 percent. What is the annual operating cash flow for this project? Group of answer choices $2,691,210 $1,894,318 $2,418,531 $2,487,211 $2,827,210
Your local athletic center is planning a $1.2 million expansion to its current facility. This cost will be depreciated on a straight-line basis over a 20-year period. The expanded area is expected to generate $745,000 in additional annual sales. Variable costs are 39* percent of sales, the annual fixed costs are $140,000, and the tax rate is 21 percent. What is the operating cash flow for the first year of this project?
1) A five-year project is expected to generate annual revenues of $159,000, variable costs of $72,500, and fixed costs of $15,000. The annual depreciation is $19,500 and the tax rate is 21 percent. What is the annual operating cash flow? 2) Your local athletic center is planning a $1.2 million expansion to its current facility. This cost will be depreciated on a straight-line basis over a 20-year period. The expanded area is expected to generate $745,000 in additional annual sales....
Cirice Corp. is considering opening a branch in another state. The operating cash flow will be $158,900 a year. The project will require new equipment costing $571,000 that would be depreciated on a straight-line basis to zero over the 5-year life of the project. The equipment will have a market value of $163,000 at the end of the project. The project requires an initial investment of $37,500 in net working capital, which will be recovered at the end of the...