Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

What is the projects cash flow for year 1? What is the projects cash flow for year 2? A firm is considering a project with

image text in transcribed

What is the projects cash flow for year 1?

What is the projects cash flow for year 2?

A firm is considering a project with the following information: Project will require purchase of a machine for $115,921.00 that is MACRS depreciable over a five-year schedule. (no depreciation until end of year 1). Project will require immediate non-depreciable expenses of $29,189.00 TODAY (year 0) Project will have the following projected balance sheet values of NWC: YEAR 0 2 NWC Level $4,000 10.00% of sales 8.00% of sales . Sales for the project will be $55,092.00 per year, with all other expenses excluding depreciation at 40.00% of sales. . The tax rate for the firm is 37.00%, while the cost of capital is 15.00% assume project goes beyond two years What is the project cash flow for year 0

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

How To Be A Finance Rock Star

Authors: Nicole A Fende, Carol Roth

1st Edition

0983765901, 978-0983765905

More Books

Students also viewed these Finance questions