Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

NPV. Miglietti Restaurants is looking at a project with the following forecasted sales: first-year sales quantity of 34,000, with an annual growth rate of 4.00%

image text in transcribed

NPV. Miglietti Restaurants is looking at a project with the following forecasted sales: first-year sales quantity of 34,000, with an annual growth rate of 4.00% over the next ten years. The sales price per unit will start at $40.00 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 $200,000 It will be depreciated using MACRS,, and has a seven-year MACRS life classification. Fixed costs will be $340,000 per year. Miglietti Restaurants has a tax rate of 35%. What is the operating cash flow for this project over these ten years? Find the NPV of the projector Mgiet Restaurants if the manufacturing equipment can be sold for $150,000 at the end of the ten-year proect and the cost of capital for this pr ects 9% What is the operating cash flow for this project in year 1? $286,833 Round to the nearest dollar.) What is the operating cash flow for this project in year 2? $(Round to the nearest dollar.)

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

Financial Liberalization And Bank Performance Empirical Evidence From Pakistan

Authors: Ghulam Shabbir Khan Niazi, Abid Aman

1st Edition

3639218220, 978-3639218220

More Books

Students also viewed these Finance questions