Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The question is in the attached file. Matthews Mining company - npv NPV.Mathews Mining Company is looking at a project that has the following forecasted

image text in transcribed

The question is in the attached file. Matthews Mining company - npv

image text in transcribed NPV.Mathews Mining Company is looking at a project that has the following forecasted sales: firstyear sales are 6,800 units, and sales will grow at 15% over the next four years (a five-year project). The price of the product will start at $124.00 per unit and will increase each year at 5%. The production costs are expected to be 62% of the current year's sales price. The manufacturing equipment to aid this project will have a total cost (including installation) of $1,400,000. It will be depreciated using MACRS, LOADING... , and has a seven-year MACRS life classification. Fixed costs will be $50,000 per year. Mathews Mining has a tax rate of 30%. What is the operating cash flow for this project over these five years? Find the NPV of the project for Mathews Mining if the manufacturing equipment can be sold for $80,000 at the end of the five-year project and the cost of capital for this project is 12%. What is the operating cash flow for this project in year 1? $ 00 (Round to the nearest dollar.) What is the operating cash flow for this project in year 2? $ 00 (Round to the nearest dollar.) What is the operating cash flow for this project in year 3? $ 00 (Round to the nearest dollar.) What is the operating cash flow for this project in year 4? $ 00 (Round to the nearest dollar.) What is the operating cash flow for this project in year 5? $ 00 (Round to the nearest dollar.)

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_2

Step: 3

blur-text-image_3

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

Foundations Of Financial Management

Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta

11th Canadian Edition

1259024970, 978-1259265921

More Books

Students also viewed these Finance questions