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please answer all questions! Required information Use the following information to answer the next three questions: You are evaluating a project for The Dogs, that
please answer all questions!
Required information Use the following information to answer the next three questions: You are evaluating a project for The Dogs, that involves the purchase of a new dog biscuit making machine. The project has a three year life and you estimate the project will increase revenues by $178,000 and will increase costs by $26,000 each year. The project requires an initial investment of $120,000 which is depreciated on a straight-line basis to zero over the 3 year project life. The machine will be sold at the end of the project for $35,000. The initial net working capital investment required for this project is $10,000 which will be recovered at the end of the project's life. The tax rate is 25% and the required return on the project is 10%. What is the intial cash outflow for this project? Mulieple Choice 100,000 $130.000 $110.000 Use the following information to answer the next three questions: You are evaluating a project for The Dogs, that involves the purchase of a new dog biscult making machine. The project has a three year life and you estimate the project will increase revenues by $178,000 and will increase costs by $26,000 each year. The project requires an initial investment of $120,000 which is depreciated on a straight-line basis to zero over the 3 year project life. The machine will be sold at the end of the project for $35,000. The initial net working capital investment required for this project is $10,000 which will be recovered at the end of the project's life. The tax rate is 25% and the required return on the project is 10%. What is the total cash flow for the project in year 3 ? Multiple Choice $160,250 $150.250 $124,000 Use the following information to answer the next three questions: You are evaluating a project for The Dogs, that involves the purchase of a new dog biscuit making machine. The project has a three year life and you estimate the project will increase revenues by $178,000 and will increase costs by $26,000 each year. The project requires an initial investment of $120,000 which is depreciated on a straight-line basis to zero over the 3 year project life. The machine will be sold at the end of the project for $35,000. The initial net working capital investment required for this project is $10,000 which will be recovered at the end of the project's life. The tax rate is 25% and the required return on the project is 10%. What is the annual cash flow associated with the depreciation tax shield for this project? Multiple Choice $10,000 340,000 310000 Animals, Inc. is considering a machine that will cost $15,000 and which can be sold after 3 years for $2,000. The machine will save Animals costs of $18,000 per year for 3 years. The machine will be depreclated on a straight line basis over three years to a zero salvage value. Animals has a 20% tax rate and a 10% cost of capital. What is the NPV of the machine? Multiple Choice $29,350 524,500 523,290 525,300 Required information Use the following to answer the next three questions: The Wall, Co. is considering the purchase of some new machinery. The new machinery costs $90,000. The machinery falls into the MACRS three-year class, and it will be sold after three years for $9,500. The depreciation percentages each year are: Year 1=33%, Year 2=45%, Year 3=15%, Year 4=7%. The machinery will require The Wall to increase its working capital by $5,100 which will be recovered at the end of the machinery's life. The machinery has a three year life and will increase The Wall's revenues by $150,000 and costs by $25,000 for each year of the project's three year life. The Wall has a 10% cost of capital and has a 20% tax rate. What is the operating cash flow in year 2 for the project? Mutiple Chaice 5125,940 $108,100 Required information Use the following to answer the next three questions: The Wall, Co. is considering the purchase of some new machinery. The new machinery costs $90,000. The machinery falls into the MACRS three-year class, and it will be sold after three years for $9,500. The depreciation percentages each year are: Year 1=33%, Year 2=45%, Year 3=15%, Year 4=7%. The machinety will require The Wall to increase its working capital by $5,100 which will be recovered at the end of the machinery's life. The machinery has a three year Nife and will increase The Wall's revenues by $150,000 and costs by $25,000 for each year of the project's three year life. The Wall has a 10% cost of capital and has a 20% tax rate. What is the initiol cash outhow for this project? Muripise Choice 595,100 5104,600 Use the following to answer the next three questions: The Wall, Co. is considering the purchase of some new machinery. The new machinery costs $90,000. The machinery falls into the MACRS three-year class, and it will be sold after three years for $9,500. The depreciation percentages each year are: Year 1=33%, Year 2=45%, Year 3=15%, Year 4=7%. The machinery will require The Wall to increase its working capital by $5.100 which will be recovered at the end of the machinery's life. The machinery has a three year life and will increase The Wall's revenues by $150,000 and costs by $25,000 for each year of the project's three year life. The Wall has a 10% cost of capital and has a 20% tax rate. What is the total cash flow in year 3 of the project? Muttiple Choice $107460 $102,700 $11560 Step by Step Solution
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