Question
What is the terminal cash flow? if the company has 30% tax rate the projected is expected to last 5 years cost of new equipment
What is the terminal cash flow?
if the company has 30% tax rate
the projected is expected to last 5 years
cost of new equipment is $10,000,000
Sale price per unit: $280 (1y to 4 year) / $180 per unit in 5 year
(1 year - 70,000 units sold/ 2year - 100,000 units sold/ 3 year- 140,000 units sold/ 4 year -70,000 units sold/ 5 year - 60,000 units sold)
variable cost per unit $140
annual fixed cost is $300,000
working capital $100,000 (for each year, the total investment in working capital will be 10% of the dollar valye of sales for that year)
doesnt have salvage valye after 5 years
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Step: 1
To calculate the terminal cash flow we need to determine the cash flow in the final year Year 5 and ...Get Instant Access to Expert-Tailored Solutions
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Step: 2
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