Question
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%
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 $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 $ 2,3000,000. It will be depreciated using MACRS, LOADING..., and has a seven-year MACRS life classification. Fixed costs will be $ 330,000per 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 $150,000 at the end of the ten-year project and the cost of capital for this project is % 9. Question content area bottom Part 1 What is the operating cash flow for this project in year 1?
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