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help ABC Corporation has hired you to evaluate a new FOUR year project for the firm. The project will require the purchase of a $828,800.00
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ABC Corporation has hired you to evaluate a new FOUR year project for the firm. The project will require the purchase of a $828,800.00 work cell. Further, it will cost the firm $59,600.00 to get the work cell delivered and installed. The work cell will be straight-line depreciated to zero witb a 20 -year useful life. The project will require new employees to be trained at a cost of $60,800.00. The project will also use a piece of equipment the firm already owns. The equipment has been fully depreciated, but has a market value of $6,500.00. Finally, the firm will invest $11,700.00 in net working capital to ensure the project has sufficient resources to be successful. The project will generate annual sales of $921,000.00 with expenses estimated at 40.0C% of sales. Net working capital will be held constant throughout the project. The tax rate is 36.00%. The work cell is estimated to have a market value of $479,000.00 at the end of the fourth year. The firm expects to reclaim 88.00% of the final NWC position. The cost of capital is 12.00%. What is the yearly operating cash flow for the project Step by Step Solution
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