Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

First, what is the annual operating cash flow of the project for each year from year 1 to year 5 ? ?Next, what is the?

image text in transcribed

First, what is the annual operating cash flow of the project for each year from year 1 to year 5 ?

?Next, what is the? after-tax cash flow of the equipment at? disposal?

?Then, what is the incremental cash flow of the project in each fom year? 0 to year 5 ?

?So, what is the IRR of the? project?

Project cash flow and NPV. The managers of Classic Autos Incorporated plan to manufacture classic Thunderbirds (1957 replicas). The necessary foundry equipment will cost a total of $4,200,000 and will be depreciated using a five-year MACRS life, EEB. The sales manager has an estimate for the sale of the classic Thunderbirds. The annual sales volume will be as follows: Year one: 250 Year two: 270 Year three: 350 Year four: 370 Year five: 300 If the sales price is $30,000 per car, variable costs are $20,000 per car, and fixed costs are $1,300,000 annually, what is the annual operating cash flow if the tax rate is 30%? The equipment is sold for salvage for $500,000 at the end of year five. Net working capital increases by $600,000 at the beginning of the project (year 0) and is reduced back to its original level in the final year. Find the First, what is the annual operating cash flow of the project for year 1? $1092000 (Round to the nearest dollar.) What is the annual operating cash flow of the project for year 2? $ 1,383,200 (Round to the nearest dollar.) What is the annual operating cash flow of the project for year 3

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

Technical Analysis Of Stock Trends

Authors: Robert D. Edwards, John Magee , W.H.C. Bassetti

11th Edition

1138069418,1351631438

More Books

Students also viewed these Finance questions

Question

Define determinants of Demand.

Answered: 1 week ago

Question

What does the start( ) method defined by Thread do?

Answered: 1 week ago