The managers of Poncho Parts, Inc. plan to manufacture engine blocks for classic cars from the 1960's era. They expect to sell 350 engine blocks annually for the next 5 years, and management believes that the auto restorers will pay $2,000 per engine block. The necessary foundry and machining equipment will require an outlay of $750,000. This amount will be depreciated straight line to zero over the projects life. The firm expects to be able to dispose of the manufacturing equipment for $150,000 at the end of the project. Labor and material costs total $750 per block, and fixed costs are $150,000 per year. Assume a 32% tax rate and a 12% discount rate.
What is the NPV of the project?
What is the IRR of the project?
Suppose that the project requires an investment of working capital of $150,000, but all else remains the same. What is the free cash flow in time 1 through time 4?
The managers of Poncho Parts, Inc. plan to manufacture engine blocks for classic cars from the...
The managers of Poncho Parts, Inc. plan to manufacture engine blocks for classic cars from the 1960s era. They expect to sell 250 blocks annually for the next five years. The necessary foundry and machining equipment will cost a total of $800,000 and belongs in a 30% CCA class for tax purposes. The firm expects to be able to dispose of the manufacturing equipment for $150,000 at the end of the project. Labour and materials costs total $500 per engine...
Project cash flow and NPV. The managers of Classic Autos Incorporated plan to manufacture classic Thunderbirds (1957 replicas). The necessary foundry equipment will cost a total of$4,100,000 and will be depreciated using a five-year MACRS life, LOADING... . The sales manager has an estimate for the sale of the classic Thunderbirds. The annual sales volume will be as follows: Year one: 250 Year four: 360 Year two: 280 Year five: 300 Year three: 340 If the sales price is $28,000...
6. The managers of Classic Autos Incorporated plan to manufacture classic Thunderbirds (1957 replicas). The necessary foundry equipment will cost a total of $4.000,000 and will be depreciated using a five-year MACRS life. Projected sales in annual units for the next five years are 300 per year. If sales price is $27.,000 per car, variable costs are $18,000 per car, and fixed costs are $1,200,000 annually, what is the annual operating cash flow if the tax rate is 30%? The...
The managers of Classic Autos incorporated. Plan to manufacture
classic Thunderbirds. The necessary foundry equipment will cost
$4000000 and will be depreciated using 5 yr MACRS life. Annual
sales yr 1 is 260, yr 2 is 280, yr 3 is 340, yr 4 is 370 yr 5 is
310.If the sales is $26000 per car, variable costs are $16,000 per
car and fixed costs are $1200000 annually. What is the annual
operating cash flow if the tax rate is 30%....
Project cash flow and NPV. The managers of Classic Autos Incorporated plan to manufacture classic Thunderbirds (1957 replicas). The necessary foundry equipment will cost a total of $4,100,000 and will be depreciated using a five-year MACRS life,囲. Pro ected sales in annual units for the next five years are 290 per year. If the sales price is $28,000 per car, variable costs are $18,000 per car, and fixed costs are $1,300,000 annually, what is the annual operating cash flow f...
The managers of Classic Autos Incorporated plan to manufacture
classic Thunderbirds (1957 replicas). The necessary foundry
equipment will cost a total of $3,800,000 and will be depreciated
using a five-year MACRS life, LOADING.... Projected sales in
annual units for the next five years are 300 per year. If the sales
price is $ 25 ,000 per car, variable costs are $18,000 per car,
and fixed costs are $1,300,000 annually, what is the annual
operating cash flow if the tax rate...
Project cash flow and NPV. The managers of Classic Autos
Incorporated plan to manufacture classic Thunderbirds (1957
replicas). The necessary foundry equipment will cost a total of
$4 comma 100 comma 0004,100,000
and will be depreciated using afive-year MACRS life,
LOADING...
. The sales manager has an estimate for the sale of the classic
Thunderbirds. The annual sales volume will be as follows:
Year one: 230230
Year four: 380380
Year two: 280280
Year five: 300300
Year three: 340340
If the...
3. Project cash flow and NPV. The managers of Classic Autos Incorporated plan to manufacture classic Thunderbirds (1957 replicas). The necessary foundry equipment will cost a total of $4,000,000 and will be depreciated using a five-year MACRS life, The sales manager has an estimate for the sale of the classic Thunderbirds. The annual sales volume will be as follows: Year one: 240 Year two: 290 Year three: 330 Year four: 350 Year five: 300 If the sales price is $26,000...
P10-20 (similar to) Question Help Project cash flow and NPV. The managers of Classic Autos Incorporated plan to manufacture classic Thunderbirds (1957 replicas). The necessary foundry equipment will cost a total of $4,500,000 and will be depreciated using a five-year MACRS life. The sales manager has an estimate for the sale of the classic Thunderbirds. The annual sales volume will be as follows: Year one: 230 Year two: 300 Year three: 360 Year four: 370 Year five: 330 If the...
10.8
(13 part question)
Project cash flow and NPV. The managers of Classic Autos Incorporated plan to manufacture classic Thunderbirds (1957 replicas). The necessary foundry equipment will cost a total of $4,300,000 and will be depreciated using a five-year MACRS life, B. The sales manager has an estimate for the sale of the classic Thunderbirds. The annual sales volume will be as follows: Year one: 230 Year two: 280 Year three: 330 Year four: 370 Year five: 330 If the...