Question
Use the following information about the potential purchase of a new assembly line to answer the next eight (8) questions : Purchase Price for assembly
Use the following information about the potential purchase of a new assembly line to answer the next eight (8) questions:
Purchase Price for assembly line | $(65,000) |
Shipping cost for assembly line | $ (5,000) |
Change in Net Working Capital | $(10,000) |
Increase in Sales | $ 45,000 |
Increase in Operating Expenses | $ 30,000 |
Increase in Annual Depreciation | $ 10,000 |
Tax Rate | 40% |
Expected Salvage Market Value for assembly line | $ 35,000 |
Expected Salvage Book Value for assembly line | $ 35,000 |
Company Cost of Capital | 10% |
Expected Life (in years) | 3 |
Question 10 options:
Using the above information, calculate the Initial Outlay (CF0) for the project.
[Do not include the $ symbol in your response, and you should round to the nearest whole dollar (i.e., if your answer is $7,654.32, then submit 7654). If your answer is a cash outflow, be sure to use a "-" sign to indicate it as such (i.e., if your answer is a cash outflow of $5,432.10, then submit -5432).]
Question 11 (4 points)
Question 11 options:
Using the above information, calculate the Annual Operating Cash Flow (you may assume that the project entails the use of straight-line depreciation).
[Do not include the $ symbol in your response, and you should round to the nearest whole dollar (i.e., if your answer is $7,654.32, then submit 7654).]
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started