Annual depreciation=(Cost-Salvage value)/Useful Life
=(2,550,000/3)=850000
OCF=(Sales-Costs)(1-tax rate)+Tax savings on Annual depreciation
=(2,710,000-1,730,000)(1-0.23)+(0.23*850000)
=$950100
H. Cochran, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment o...
H. Cochran, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2,410,000. 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 $2,710,000 in annual sales, with costs of $1,730,000. Assume the tax rate is 23 percent and the required return on the project is 9 percent. What is the project’s NPV? (A negative answer should...
H. Cochran, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2,300,000. 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 $2,410,000 in annual sales, with costs of $1,430,000. If the tax rate is 23 percent, what is the OCF for this project? (Do not round intermediate calculations and round your answer to 2...
H. Cochran, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $3,150,000. 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 $3,430,000 in annual sales, with costs of $2,450,000. If the tax rate is 25 percent, what is the OCF for this project? (Do not round intermediate calculations and round your answer to 2...
H. Cochran, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2,450,000. 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 $2,590,000 in annual sales, with costs of $1,610,000. If the tax rate is 21 percent, what is the OCF for this project? (Do not round intermediate calculations and round your answer to 2...
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H. Cochran, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2,500,000. 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 $2,650,000 in annual sales, with costs of $1,670,000. If the tax rate is 22 percent, what is the OCF for this project? (Do not round intermediate calculations and round your answer to 2...
H. Cochran, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2,500,000. 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 $2,650,000 in annual sales, with costs of $1,670,000. If the tax rate is 22 percent, what is the OCF for this project? (Do not round intermediate calculations and round your answer to 2...
H. Cochran, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $3,000,000. 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 $3,250,000 in annual sales, with costs of $2,270,000. If the tax rate is 22 percent, what is the OCF for this project? (Do not round intermediate calculations and round your answer to 2...
H. Cochran, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $3,000,000. 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 $3,250,000 in annual sales, with costs of $2,270,000. If the tax rate is 22 percent, what is the OCF for this project? (Do not round intermediate calculations and round your answer to 2 decimal...