Question
Please help me calculate the terminal cash flows for this problem. Please help me find the initial investment and operating cash flows for all 9
Please help me calculate the terminal cash flows for this problem.
Please help me find the initial investment and operating cash flows for all 9 years given the follow factors:
Equipment $9,250,000.00
Investment in inventory $775,000.00
Increase in Accounts Payable$225,000.00
Time in years 9
Equipment Salvage Value $65,000.00
Estimated Sales Yr. 1 $2,125,000.00
Sales growth Year 2-50%
Sales growth Year 3- 25%
Sales growth Years 4 & 5-15%
Sales growth Year 6-10%
Sales growth Years 7,8,9- 5%
Production fixed costs $234,000
Annual variable costs 42% of revenue
MACRS Depreciation
Year 1: 20%
Year 2: 32%
Year 3: 19.20%
Year 4: 11.52%
Year 5: 11.52%
Year 6: 5.76%
THANKS!!
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started