Question
1.) ABC Inc. has estimated the following revenues and expenses related phase I of a proposed new housing development? Incremental sale= $6,335,814 total cash expenses
1.) ABC Inc. has estimated the following revenues and expenses related phase I of a proposed new housing development? Incremental sale= $6,335,814 total cash expenses $3,212,642, depreciation $388,125, taxes 29%, interest expense, $200,00. What is the operating cash flow?
2.) A project requires $89,775 of equipment that is classified as 7-year property. What is the book value of this asset at the end of year 3 given the follow MACRS depreciation allowances, starting with year one: 14.29, 24.49, 17.49, 12.49, 8.93, 8.92, 8.93, and 4.46 percent?
3.) ABC Inc. has estimated the following revenues and expenses related phase I of a proposed new housing development? Incremental sales= $644,939, total cash expenses $275,476, depreciation $32,862, taxes 34%. What is the operating cash flow?
4.) ABC Company has the following projections for Year 1 of a capital budgeting project
Year 1 Incremental projections:
Sales: $689,059
Variable Costs: $28,147
Fixed Costs: $83,250
Depreciation Expense: $43,837
Tax Rate: 31%
What is the operating cash flow?
5.) ABC Company purchased $28,142 of equipment 5 year ago. The equipment is 7-year MACRS property. The firm is selling this equipment today for $9,252. What is the After-tax salvage value if the tax rate is 32%? The MACRS allowance percentages are as follows, commencing with year one: 14.29, 24.49, 17.49, 12.49, 8.93, 8.92, 8.93, and 4.46 percent
6.) A project requires $32,829 of equipment that is classified as 7-year property. What is the book value of this asset at the end of year 5 given the following MACRS depreciation allowances, starting with year one: 14.29, 24.49, 17.49, 12.49, 8.93, 8.92, 8.93, and 4.46 percent
7.) ABC Company purchased some new equipment 2 years ago for $108,649. Today, it is selling this equipment for $33,990. What is the after-tax cash flow form this sale if the tax rate is 39%? The MACRS allowance percentages are as following, commencing with year one: 20.00, 32.00, 19.20, 11.52, 11.52, and 5.76 percent.
8.) A project has an initial requirement of $207,062 for new equipment and $8,068 for net working capital. The fixed assets will be depreciated to a zero book value over the 3 year life of the project and have an estimated salvage value of $84,693. All of the net working capital will be recouped at the end of the project. The annual operating cash flow is $77,284 and the cost of capital is 11% What is the projects NPV if the tax rate is 26%?
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