Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

can someone please explain with formulas and all work shown? i rate! :) A project has an operating cash flow of $33,000. Initially, this 4-year

can someone please explain with formulas and all work shown? i rate! :) image text in transcribed
image text in transcribed
A project has an operating cash flow of $33,000. Initially, this 4-year project required $5,600 in net working capital, which is recoverable when the project ends. The firm also spent $16,400 on equipment to start the project. This equipment will have a book value of $2,800 at the end of year 4. What is the cash flow for year 4 of the project if the equipment can be sold for $4,500 and the tax rate is 35 percent? A project has an initial requirement of $310,000 for fixed assets and $62,000 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 $155,000. All of the net working capital will be recouped at the end of the project. The annual operating cash flow is $345,000 and the discount rate is 18 percent. What is the project's net present value if the tax rate is 34 percent

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

=+50. Now deduce Theorem 3.3 from part (a).

Answered: 1 week ago