Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question 1 (8 points) What is the annual operating cash flow (OCF) for a 10-year project that has annual sales of $700,000, its variable costs

image text in transcribed
Question 1 (8 points) What is the annual operating cash flow (OCF) for a 10-year project that has annual sales of $700,000, its variable costs are 80% of sales and has annual fixed costs of $150,000. The project requires new equipment at a cost of $50,000 and installation costs of $3,000 and a plant that costs $100,000. Depreciation is under the straight line method and the equipment has an estimated life of 10 years and the plant an estimated life of 30 years. The tax rate is 30% and the discounting rate is 10%. In your answer, use commas to separate thousands do not use the dollar $ sign, and round to the nearest two decimals. For example, if your answer is $34,456.729 then enter 34,456.73. If answer is a negative cash flow, enter the minus sign in front of the first number (do not enter a parenthesis to represent a negative number). For example, if your answer is -$2,511.00 then enter -2,511.00

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

Analysis For Financial Management

Authors: Robert Higgins

6th Edition

0071181172, 9780071181174

More Books

Students also viewed these Finance questions

Question

Differentiate between imprecision and bias.

Answered: 1 week ago

Question

Sketch and label the hierarchy of needs.

Answered: 1 week ago

Question

2. What role should job descriptions play in training at Apex?

Answered: 1 week ago