Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A project will require $ 5 1 2 , 0 0 0 for fixed assets and $ 4 7 , 0 0 0 for net

A project will require $512,000 for fixed assets and $47,000 for net working capital. The fixed assets will be depreciated straight-line to a zero-book value over the six-year life of the project. No bonus depreciation will be taken. At the end of the project, the fixed assets will be worthless. The net working capital returns to its original level at the end of the project. The project is expected to generate annual sales of $965,000 and costs of $508,000. The tax rate is 21 percent, and the required rate of return is 14.7 percent. What is the amount of the annual operating cash flow?
$283,633.33
$447,826.67
$378,950.00
$245,300.00
$198,300.00
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Money Banking And Financial Markets

Authors: Stephen Cecchetti

2nd Edition

0073523097, 9780073523095

More Books

Students also viewed these Finance questions

Question

consider how qualitative data can add value to your research;

Answered: 1 week ago

Question

consider the use of electronically obtained qualitative data;

Answered: 1 week ago