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Problem 9.1 An Investment has expected sales of 50.000 unit with the selling price of $30 each unit. The Variable cost are 50% of sales
Problem 9.1 An Investment has expected sales of 50.000 unit with the selling price of $30 each unit. The Variable cost are 50% of sales and fixed cost are $100.000. The Investment would required fixed assets cost $100,000 with useful life 4 years. Assuming a tax rate of 30% percent. What is the projected net income? Problem 9.2 Calculate the Operating Cash flow using the four different approaches from problem 1 Problem 9.3 If the new OCF is $50.000 with the new required fixed assets cost $100.000, should we accept or reject the project if the change of net working capital is $70,000 that will be recovered at the end of the project and the required return is 15%? (t=4 years)
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