Annual Depreciation = (Cost - Salvage) / Useful Life
= ( $ 2,300,000 - $ 0) / 3
= $ 766,666.6667
Particulars | Amount($) |
Sales | 24,10,000.00 |
Less: Cost | 14,30,000.00 |
Less:depreciation | 7,66,666.67 |
EBIT | 2,13,333.33 |
Less:taxes @23% | 49,066.67 |
Net income | 1,64,266.67 |
OCF=Earnings before interest and taxes-Taxes+Depreciation
= $ 213,333.33- $ 49,066.67 + 766,666.6667
= $ 930,933.33
Hence the correct answer is $ 930,933.33
H. Cochran, Inc., is considering a new three-year expansion project that requires an initial fixed asset...
H. Cochran, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2,800,000. 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 $3,010,000 in annual sales, with costs of $2,030,000. 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 decimal...
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...
H. Cochran, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2,550,000. 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. 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 $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 $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 $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...
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 decimal...