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 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 $42.00 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 $2,100,000. It will be depreciated using MACRS, E, and has a seven-year MACRS life classification. Fixed costs will be $330,000 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 project for Miglietti Restaurants if the manufacturing equipment can be sold for $140,000 at the end of the ten-year project and the cost of capital for this project is 8%. What is the operating cash flow for this project in year 1? i X Data Table (Round to the nearest dollar.) MACRS Fixed Annual Expense Percentages by Recovery Class Click on this icon to download the data from this table Year 3-Year 1 2 33.33% 44.45% 14.81% 7.41% 5-Year 20.00% 32.00% 19.20% 11.52% 11.52% 5.76% 7-Year 14.29% 24.49% 17.49% 12.49% 8.93% 3 4 5 10-Year 10.00% 18.00% 14.40% 11.52% 9.22% 7.37% 6.55% 6.55% 6.55% 6.55% 3.28% 8.93% 6 7 8.93% 4.45% 8 9 10 11 Enter your answer in the answer box and then click Check Answer. NPK. Miglieti Restaurants is looking at a project with the following forecasted sales: first-year sales quantity of 35,000, with an annual growth rate of 4.00% over the next ten years. The sales price per unit will start at $40.00 and wil grow at 2.00% per year. The production costs are expected to be 58% of the current year's sales price. The manufacturing equipment to aid this project will have a total cost including installation of $2,300,000. It will be depreciated using MACRS, M, and has a seven year MACRS le classification. Fored costs will be $330,000 per year. Miglietti Restaurants has a tax rate of 38%. What is the operating cash flow for this project over these ten years? Find the NPV of the project for Miglett Restaurants the manufacturing equipment can be sold for $150,000 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 19 (Round to the nearest dolar) Data Table MACRS Fixed Annual Expense Percentages by Recovery Class Click on this icon to download the data from this table 33.33% 44 45 5. Year 20.00% 3200 19 20% 114 7 Year 14.20 24.49% 17.49% 1240 8.9 Year 1 2 3 4 5 6 7 8 9 50 11 10-Year 1000 1800 14.40% 11.52% 9.22% 7.37% 6.56% 655 6555 6561 3209 5.78% 4491 Enter your answer in the answer box and then click Check Answer Done Check Answer Print 11 ports remaining

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

Cornerstones Of Financial Accounting

Authors: Jay Rich, Jeff Jones, Maryanne Mowen, Don Hansen

2nd Edition

0538473452, 9780538473453

More Books

Students also viewed these Finance questions