Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Quad Enterprises is considering a new 3-year expansion project that requires an initial fixed asset investment of $5.724 million. The fixed asset will be depreciated

image text in transcribed
image text in transcribed
Quad Enterprises is considering a new 3-year expansion project that requires an initial fixed asset investment of $5.724 million. The fixed asset will be depreciated straight-line to zero over its 3-year tax life, after which time it will be worthless. The project is estimated to generate $5,088,000 in annual sales, with costs of $2,035,200. If the tax rate is 21 percent, what is the OCF for this project? Multiple Choice O $2,671,772 $904,392 $2,812,392 $3,052,800 $2.953,012 Winnebagel Corp. currently sells 18,600 motor homes per year at $27,900 each, and 7,440 luxury motor coaches per year at $52,700 each. The company wants to introduce a new portable camper to fill out its product line; it hopes to sell 11,780 of these campers per year at $7,440 each. An independent consultant has determined that if the company introduces the new campers, it should boost the sales of its existing motor homes by 2,790 units per year, and reduce the sales of its motor coaches by 558 units per year. What is the amount to use as the annual sales figure when evaluating this project? Multiple Choice $142,881,480 $136,077,600 $87,643,200 $129.273.720 O $194,890,800

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

International Finance Discussion Papers Managing Beliefs About Monetary Policy Under Discretion

Authors: United States Federal Reserve Board, Elmar Mertens

1st Edition

1288704577, 9781288704576

More Books

Students also viewed these Finance questions