Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

based on first picture i need help filling total cash flows Sales (5000 of units @ $7 per unit) Variable Costs ($3.5 per unit) Fixed

based on first picture i need help filling total cash flows
image text in transcribed
image text in transcribed
image text in transcribed
Sales (5000 of units @ $7 per unit) Variable Costs ($3.5 per unit) Fixed Costs Depreciation EBIT Taxes (34%) Net Income Operating Cash Flow = NI + Dep = 8630 $35000 $17500 $7000 $ 5000 $5500 1870 $3630 OCF ANWC -$ Capital -$ CFFA -$ Spending 0 1 $8630 $ Year 2 $8630 $ 3 $8630 $ $ Retail cost/item: $7.00 Variable cost/item (how much it costs to produce): $3.50 Fixed costs/year: $7000/year (you can make up this #) Cost of new equipment to make new product (CF): $20,000 Depreciation per year of new equipment: $5,000 a year Corporate Tax Rate: 21 percent. Required rate of return: 15% Create a pro forma income statement and determine net income and then operating cash flow / year. Based on the cash flows of your project, should you launch your product

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Students also viewed these Finance questions

Question

Describe ERP and how it can create efficiency within a business

Answered: 1 week ago