Miglietti Restaurants is looking at a project with the following forecasted sales: first-year sales quantity of 32,000, with an annual growth rate of 4.00% over
Miglietti Restaurants is looking at a project with the following forecasted sales: first-year sales quantity of 32,000, with an annual growth rate of 4.00% over the next ten years. The sales price per unit will start at $43.00 and will grow at 2.00% per year. The production costs are expected to be 55% of the current year's sales price. The manufacturing equipment to aid this project will have a total cost (including installation) of $2,500,000. It will be depreciated using MACRS, LOADING... , and has a seven-year MACRS life classification. Fixed costs will be $360,000 per year. Miglietti Restaurants has a tax rate of 30%. What is the operating cash flow for this project over these ten years? Find the NPV of the project for Miglietti Restaurants if the manufacturing equipment can be sold for $160,000 at the end of the ten-year project and the cost of capital for this project is 7%.
NPV. Miglietti Restaurants is looking at a project with the following forecasted sales: first-year sales quantity of 32,000, with an annual growth rate of 4.00% over the next ten years. The sales price per unit will start at $43.00 and will grow at 2.00% per year. The production costs are expected to be 55% of the current year's sales price. The manufacturing equipment to aid this project will have a total cost (including installation) of $2,500,000. It will be depreciated using MACRS, B: , and has a seven-year MACRS life classification. Fixed costs will be $360,000 per year. Miglietti Restaurants has a tax rate of 30%. What is the operating cash flow for this project over these ten years? Find the NPV of the project for Miglietti Restaurants if the manufacturing equipment can be sold for $160,000 at the end of the ten-year project and the cost of capital for this project is 7%. What is the operating cash flow for this project in year 1? (Round to the nearest dollar.) Data table MACRS Fixed Annual Expense Percentages by Recovery Class Click on this icon to download the data from this table Year 3-Year 7-Year 1 10-Year 10.00% 18.00% 2 33.33% 44.45% 14.81% 7.41% 3 5-Year 20.00% 32.00% 19.20% 11.52% 11.52% 5.76% 14.40% 11.52% 4 14.29% 24.49% 17.49% 12.49% 8.93% 8.93% 8.93% 4.45% 5 6 7 8 9.22% 7.37% 6.55% 6.55% 6.55% 6.55% 3.28% 9 10 11 Print DoneStep by Step Solution
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