Calculate the operating cash flows for the new project

Assignment Help Financial Management
Reference no: EM13915424

Assume that a new project will annually generate revenues of $2,300,000 and cash expenses (including both fixed and variable costs) of $700,000, while increasing depreciation by 170,000 per year. In addition the firm’s tax rate is 33%. Calculate the operating cash flows for the new project.

Reference no: EM13915424

Questions Cloud

Receive payment : It produces its candy and sells it to distributors in May for $220,000, but it does not receive payment until June.
Does a hollywood camera make on-screen characters : Does a Hollywood camera make on-screen characters seem more charming and stunning than they really look? I was review a movie the on-screen character was lovely in the film then when i saw her honest to goodness picture she didn't quiet look what she..
Gbi employees not currently involved in the sales to cash : Assign tasks to reflect the separation of duties to each of the employees listed in the original matrix or assign tasks to other GBI employees not currently involved in the sales-to-cash process. Add any of the following roles to your new matrix that..
Molton corporation had the following stock issued : Molton Corporation had the following stock issued and outstanding at January 1, 2013:
Calculate the operating cash flows for the new project : Assume that a new project will annually generate revenues of $2,300,000 and cash expenses (including both fixed and variable costs) of $700,000, while increasing depreciation by 170,000 per year. In addition the firm’s tax rate is 33%. Calculate the ..
Income increases retained earnings : Prepare the stockholders' equity section of the balance sheet at December 31, 2011. Include a supporting schedule showing your computation of retained earnings, at the balance sheet date. (Hint: Income increases retained earnings, whereas dividends d..
Compute the year nine future value if deposits : Given an 10 percent interest rate, compute the year 9 future value if deposits of $2,700 and $3,700 are made in years 1 and 3, respectively, and a withdrawal of $1,125 is made in year 4.
Interest expense and interest paid : What was the difference between the interest expense and interest paid in 2013? How much long-term debt will mature in 2014?
What is the stocks new required rate of return : Data for Dana Industries is shown below. Now Dana acquires some risky assets that cause its beta to increase by 35%. In addition, expected inflation increases by 2.40%. What is the stock's new required rate of return?

Reviews

Write a Review

Financial Management Questions & Answers

  Calculate the price as present value of future cash flows

The trick here is just to calculate the price as the present value of future cash flows, just like in Chapter 6. Notice that the coupon payments) don't start immediately for one bond. You must adjust the present value equation for an annuity to refle..

  Net present value and internal rate of return

Aunt Sally’s Foods, Inc. is a full line producer and distributor of ready to use jarred food products such as gravies and sauces. Their products are well received in the marketplace competing with such brand names as Franco-American, Ragu and Heinz. ..

  Properly evaluate projects of unequal lives

Which of the following methods of evaluating investment projects can properly evaluate projects of unequal lives?

  Yield to maturity-value of bond

A $1,000 par value 10-year bond with a 10 percent coupon rate recently sold for $900. The yield to maturity is:

  Consider the sequence of cash flows

Consider the sequence of cash flows R0 = ?50, 000, R1 = 20, 000, R2 = 10, 000, R3 = Y . Find the minimum value of Y which guarantees that there is a unique positive yield rate

  What is the retained earnings balance at the end of the year

Cindy's Crafts had beginning retained earnings of $51,200. During the year, the company reported sales of $112,400, costs of $75,800, depreciation of $9,100, dividends of $1,500, and interest paid of $2,300. The tax rate is 34 percent. What is the re..

  What is the market rate of return on this stock

The common stock of Eddie's Engines, Inc. sells for $45.08 a share. The stock is expected to pay $3.50 per share next year. Eddie's has established a pattern of increasing their dividends by 5.6 percent annually and expects to continue doing so. What..

  Computer equipment on straight-line basis

Suppose Clorox can lease a new computer data processing system for $975,000 per year for five years. Alternatively, it can purchase the system for $4.25 million. If Clorox will depreciate the computer equipment on a straight-line basis over the next ..

  Makes no coupon payments over the life of the bond

The McKeegan Corporation has two different bonds currently outstanding. Bond M has a face value of $11,000 and matures in 20 years. The bond makes no payments for the first 8 years, then pays $800 every six months over the subsequent 4 years, and fin..

  What is the relationship between two companies

What is the relationship between your companies (Walmart and Target) and their respective employees and investors? How do these relationships affect financial performance? Are there any issues outstanding for your companies? Provide a rationale for y..

  Level of confidence of equally weighted portfolio

Choose any three ASX listed stocks and calculate 10-day VaR(Value at Risk) at 99% level of confidence of an equally weighted portfolio of these three assets at pertain point of time using Historical and Monte Carlo simulation. You can choose any size..

  Trader opens a margin account

A trader opens a margin account and purchases 500 shares of Google at $40 per share. The initial margin requirement is 50%. If price increases to $50 per share, how many more shares she can buy by borrowing more from her broker?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd