Papa’s project has fixed costs of $70,000 per year. OCF is $30,000 at 5,000 quantity of...
- Papa’s project has fixed costs of $70,000 per year. OCF is $30,000 at 5,000 quantity of sales. If quantity sold increases from 5,000 to 5,300 what will be the new OCF after this increase in quantity of sales?
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Papa’s project has fixed costs of $70,000 per year. OCF is $30,000 at 5,000 quantity of...
Papa’s project has fixed costs of $70,000 per year. OCF is $30,000 at 5,000 quantities of...
Papa’s project has fixed costs of $70,000 per year. OCF is $30,000 at 5,000 quantities of sales. If quantity sold increases from 5,000 to 5,300, what will be the new OCF after this increase in quantity of sales? A. 31,000 B. 32,000 C. 33,000 D. 36,000 E. 39,700
A proposed project has fixed costs of $38,000 per year. The operating cash flow at 7,000...
A proposed project has fixed costs of $38,000 per year. The
operating cash flow at 7,000 units is $88,000.
A proposed project has fixed costs of $38,000 per year. The operating cash flow a 7,000 units is $88,000. a. Ignoring the effect of taxes, what is the degree of operating leverage? 1.43187 b. If units sold rise from 7,000 to 7,500, what will be the increase in operating cash flow? 10.23% 23.68% 12.17% 11.15% 8.29% c. What is the new...
A project has fixed costs of $2,400 per year, depreciation charges of $300 a year, annual...
A project has fixed costs of $2,400 per year, depreciation charges of $300 a year, annual revenue of $21,600 and variable costs equal to two-thirds of revenues. A.) if sales increase by 19%, what will be the percentage increase in pretax profits? B.) what is the degree of operating leverage of this project?
Problem 10-9 Calculating Project OCF [LO1] Keiper, Inc., is considering a new three-year expansion project that...
Problem 10-9 Calculating Project OCF [LO1] Keiper, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2.40 million. The fixed asset will be depreciated straight-ine to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $1,980,000 in annual sales, with costs of $675,000. If the tax rate is 34 percent, what is the OCF for this project? (Enter your answer in dollars, not...
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?
Consider a five-year project with the following information: initial fixed asset investment = $1,060,000; straight-line depreciation...
Consider a five-year project with the following information: initial fixed asset investment = $1,060,000; straight-line depreciation to zero over the ten-year life; zero salvage value; price = $42.50/unit; variable costs = $19.70/unit; fixed costs = $412,000 per year; quantity sold = 200,000 units per year; tax rate = 25%. How sensitive is OCF to changes in quantity sold (i.e., what is the change in OCF given an increase of one unit sold in a year)? $17.10 $16.22 $15.41 $14.63 $18.59
Problem 9-9 Calculating Project OCF (LO 2] Cochrane, Inc., is considering a new three-year expansion project...
Problem 9-9 Calculating Project OCF (LO 2] Cochrane, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2,250,000. 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 $2,200,000 in annual sales, with costs of $1,190,000. Required: If the tax rate is 40 percent, what is the OCF for this project? (Do not round intermediate calculations....
Q1 Problem 10-9 Calculating Project OCF [LO1] Quad Enterprises is considering a new three-year expansion project that r...
Q1
Problem 10-9 Calculating Project OCF [LO1] Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.33 million. 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 $1,663,000 in annual sales, with costs of $637,000. If the tax rate is 22 percent, what is the OCF for this project? (Do not round intermediate...
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 $1,160,000, has a ten-year life, and has no salvage...
We are evaluating a project that costs $1,160,000, has a ten-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 44,000 units per year. Price per unit is $45, variable cost per unit is $20, and fixed costs are $645,000 per year. The tax rate is 35 percent, and we require a 20 percent return on this project. a-1 Calculate the accounting break-even point. Break-even point...
A proposed project has fixed costs of $38,000 per year. The
operating cash flow at 7,000 units is $88,000.
A proposed project has fixed costs of $38,000 per year. The operating cash flow a 7,000 units is $88,000. a. Ignoring the effect of taxes, what is the degree of operating leverage? 1.43187 b. If units sold rise from 7,000 to 7,500, what will be the increase in operating cash flow? 10.23% 23.68% 12.17% 11.15% 8.29% c. What is the new...
Problem 10-9 Calculating Project OCF [LO1] Keiper, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2.40 million. The fixed asset will be depreciated straight-ine to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $1,980,000 in annual sales, with costs of $675,000. If the tax rate is 34 percent, what is the OCF for this project? (Enter your answer in dollars, not...
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?
Problem 9-9 Calculating Project OCF (LO 2] Cochrane, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2,250,000. 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 $2,200,000 in annual sales, with costs of $1,190,000. Required: If the tax rate is 40 percent, what is the OCF for this project? (Do not round intermediate calculations....
Q1
Problem 10-9 Calculating Project OCF [LO1] Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.33 million. 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 $1,663,000 in annual sales, with costs of $637,000. If the tax rate is 22 percent, what is the OCF for this project? (Do not round intermediate...
We are evaluating a project that costs $1,160,000, has a ten-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 44,000 units per year. Price per unit is $45, variable cost per unit is $20, and fixed costs are $645,000 per year. The tax rate is 35 percent, and we require a 20 percent return on this project. a-1 Calculate the accounting break-even point. Break-even point...
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