Question
.Use This information for the next 3 questions: You buy a 2 million dollar building for an 8 year project. You can depreciate it over
.Use This information for the next 3 questions: You buy a 2 million dollar building for an 8 year project. You can depreciate it over 20 years. In 8 years, you sell the building for 1.6 million dollars. Over the 8 year project, you project needing net working capital as follows Years 0, 1, 2, you need 100,000 of capital Years 3, 4, 5 you need 140,000 of capital Years 6, 7, 8 you need 175,000 of capital Because you took this project, you foresee sales increasing by 540,000. Cogs will increase by 200,000. Youll pay 50,000 of interest on the debt for the building. Your tax rate is 25%
4) Find the cash flow from selling the machine in year 8
5) Find the change in net working capital for year 3
6) find the operating cash flow each year of the project.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started