ANSWER ALL

1a.

1b.

(Calculating operating cash flows) The Heritage Farm Implement Company is considering an investment that is expected to generate revenues of $3,500,000 per year. The project will also involve annual cash expenses (including both fixed and variable costs) of $500,000, while increasing depreciation by $380,000 per year. If the firm's tax rate is 38 percent, what is the project's estimated net operating profit after taxes? What is the project's annual operating cash flow? At a tax rate of 38%, the project's estimated net operating profit after taxes (NOPAT) is $ (Round to the nearest dollar.) (Related to Checkpoint 12.1) (Calculating operating cash flows) Assume that a new project will annually generate revenues of $2,600,000 and cash expenses (including both fixed and variable costs) of $500,000, while increasing depreciation by $190,000 per year. In addition, the firm's tax rate is 28 percent. Calculate the operating cash flows for the new project. The firm's operating cash flows are $ (Round to the nearest dollar.)