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help me question 12 pls show clear formulate LO 2 9. Calculating Project OCF. H. Cochran, Inc., is considering a new three-year expansion project that
help me question 12 pls show clear formulate
LO 2 9. Calculating Project OCF. H. Cochran, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $1,950,000. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $2,145,000 in annual sales, with costs of $1,205,000. If the tax rate is 35 percent, what is the OCF for this project? LO 2 10. Calculating Project NPV. In the previous problem, suppose the required return on the project is 14 percent. What is the project's NPV? LO 2 11. Calculating Project Cash Flow from Assets. In the previous problem, suppose the project requires an initial investment in net working capital of $150,000, and the fixed asset will have a market value of $175,000 at the end of the project. What is the project's Year 0 net cash flow? Year 1 ? Year 2? Year 3 ? What is the new NPV? LO 2 12. NPV and Modified ACRS. In the previous problem, suppose the fixed asset actually falls into the three-year MACRS class. All the other facts are the same. What is the project's Year 1 net cash flow now? Year 2? Year 3? What is the new NPV? 102 13. Project Evaluation. Kolby's Korndogs is looking at a new sausage system with an installed cost of $655,000. This cost will be depreciated straight-line Step by Step Solution
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