Question
Operating Cash Flow The financial staff of Cairn Communications has identified the following information for the first year of the roll-out of its new proposed
Operating Cash Flow
The financial staff of Cairn Communications has identified the following information for the first year of the roll-out of its new proposed service:
Projected sales | $25 million |
Operating costs (not including depreciation) | 13 million |
Depreciation | 4 million |
Interest expense | 4 million |
The company faces a 30% tax rate. What is the project's operating cash flow for the first year (t = 1)? Write out your answer completely. For example, 2 million should be entered as 2,000,000.
$
Allen Air Lines must liquidate some equipment that is being replaced. The equipment originally cost $23 million, of which 85% has been depreciated. The used equipment can be sold today for $5.75 million, and its tax rate is 35%. What is the equipment's after-tax net salvage value? Write out your answer completely. For example, 2 million should be entered as 2,000,000.
$
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