Answered step by step
Verified Expert Solution
Link Copied!

Question

...
1 Approved Answer

You are evaluating a project and currently trying to calculate the final cash flows for a project. Please calculate only the final cash flow for

image text in transcribed
image text in transcribed
You are evaluating a project and currently trying to calculate the final cash flows for a project. Please calculate only the final cash flow for Year 3 for this problem (you do not have to calculate other years). Assume the project will conclude at the end of year 4 and NOWC will be reduced at t=4 to 0. INPUTS: QUANTITY: 100,000 : 120,000, 100,000 AND 10000 units for years 1, 2, 3 and 4 respectively, PRICE: $2.00 per unit for each year of the project VC RATE: 75.0% of revenues Tax RATE: 20% marginal Depreciation Method 3-yr MACRS Equipment Cost $195,000 Shipping cost $10.000 Installation Cost $30,000 Increase in inventory $5,000 (yr O only) Increase in Accounts payable $ (yr O only) Salvage Value $15,000 end of year 4 Return of NWC Occurs in Yr 4 and no other NWC changes in years 1, 2 or 3 *3-year MACRS use 33.33%, 44.45%, 14.81% and 7.41% for the four years What is the cash flow in year 3? Round your answer to the nearest dollar (es. $xx.xxx) What is the cash flow in year 3? Round your answer to the nearest dollar leg. $xxxxx) $65,498 $81.737 $52.441 $55,665 $68,892 $46,961

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Students also viewed these Finance questions