Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

WILL THUMBS UP FOR CORRECT ANSWER! :) Question 6 0.5 pts Prior to IST Consulting firm completing the survey and providing the information. Christina purchased

WILL THUMBS UP FOR CORRECT ANSWER! :)

image text in transcribed

image text in transcribed

Question 6 0.5 pts Prior to IST Consulting firm completing the survey and providing the information. Christina purchased a lotin Chambersburg, PA at a deep discount for $236.000. The lot will be used to build the dealershia city of the project is approved. The market value of the lot is $310,000. The building cost for the state of the art facility is estimated to be $4,000,000. The equipment cost is $3.000.000. What is the initial cash flow of the project? The initial cash flow-$ use a minus sign for a negativt cash flow! I&T Consulting Firm provides the following estimates: Annual sales at Chambersburg location = 546 cars The average selling price = $52,000 per car The average cost = $46,000 per car Fixed cost including labor and advertising - $3,000,000 per year The equipment cost is $2,000,000 and falls under 5-year MACRS. The depreciation rates are as follow: Year 1 2 C 4 5 6 Rate 20% 32% 19.2% 11:52% 11.5296 5.76% The tax rate is 20%. What is the operating cash flow for Year 2? Ignore the side effects for this question, use a minus sign Operating cash flow for Year 2 = $ for a negative cash flow]

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

Contemporary Financial Management

Authors: James R Mcguigan, R Charles Moyer, William J Kretlow

10th Edition

978-0324289114, 0324289111

More Books

Students also viewed these Finance questions