Question
What is the operating cash flow for this project in year 1? (Round to the nearest dollar.) What is the operating cash flow for this
What is the operating cash flow for this project in year 1?
(Round to the nearest dollar.)
What is the operating cash flow for this project in year 2?
(Round to the nearest dollar.)
What is the operating cash flow for this project in year 3?
(Round to the nearest dollar.)
What is the operating cash flow for this project in year 4?
(Round to the nearest dollar.)
What is the operating cash flow for this project in year 5?
(Round to the nearest dollar.)
What is the after-tax cash flow of the project at disposal?
(Round to the nearest dollar.)
What is the NPV of the project?
(Round to the nearest dollar.)
NPV. Mathews Mining Company is looking at a project that has the following forecasted sales: first-year sales are 6,400 units, and sales will grow at 12% over the next four years (a five-year project). The price of the product will start at $130.00 per unit and will increase each year at 5%. The production costs are expected to be 65% of the current year's sales price. The manufacturing equipment to aid this project will have a total cost (including installation) of $1,350,000. It will be depreciated using MACRS, B, 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 10%Step by Step Solution
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