Calculate the operating cash flows for the project

Assignment Help Financial Accounting
Reference no: EM133055811

Question - The airline that you work for is considering flying a new route from Brisbane to Vancouver. To do this the airline will need to buy a new aircraft that is capable of the longer distance. The plane will cost $35 million. Fuel and parking costs will be $3 million per year. In addition, you will have labour costs summing to $7 million annually. You estimate that the revenue per year will be $40 million. In order to attract passengers you will need to do a yearly marketing campaign that will cost $5,000,000. Your plane has a useful life of 10 years, will be depreciated on a straight line basis to a value of $1,000,000 and will be sold for scrap for $500,000 after 10 years when you will cease flying the route. The cost of capital is 3%. The tax rate is 35%. Calculate the operating cash flows for the project.

Reference no: EM133055811

Questions Cloud

Calculate the amount of taxes payable : A year and half ago, Max purchased 5,000 shares in a mutual fund called Epic Inc. for $15.75/share. Due to COVID-19, the stock was an epic failure and Max decid
Prepare an incremental analysis for the special order : Fixed costs for the period were costs of goods sold $960,000, and selling and administrative expenses $225,000. Prepare an incremental analysis for the special
What is the appropriate required return of csb : If the expected market return is 14.5% and the risk-free rate is 5.5%, what is the appropriate required return of CSB (using the CAPM)?
What is the company total cost of issuing the securities : IPO pricing: Myriad Biotech plans a $114 million IPO with an offer price of $5.10 per share, underwritten at $4.30.
Calculate the operating cash flows for the project : The airline that you work for is considering flying a new route from Brisbane to Vancouver. Calculate the operating cash flows for the project
What is the npv of a investment opportunity : 1) Thomas Green is using net present value (NPV) when evaluating investment opportunities. His required rate of return is 11.07 percent.
What is the incremental annual cash flow from operations : Depreciation costs of the production plant are $51,000 per year. The marginal tax rate is 40 percent. What is the incremental annual cash flow from operations
Customer relationships-integrating scm-crm and erp : Compare SCM and CRM from an IT manager's perspective. Why are SCM, CRM, and ERP targets of hackers?
Capital budgeting project selection assignment : Capital Budgeting Project Selection Assignment. For the following two projects, determine the

Reviews

Write a Review

Financial Accounting Questions & Answers

  Journalize the entries to record the april transactions

On April, 10 2010, Cougs Company issued for cash 20,000 shares of no-par common stock for $40. Journalize the entries to record the April 10, April 15 and May 1 transactions.

  What is the company pre-tax WACC

A business requires an investment of € 30,000 and borrows € 7,500 at 7%. If the return on equity is 18%, what is the company's pre-tax WACC

  What amount should mont report as total assets

What amount should Manchester report as total current liabilities on December 31, 2021? What total amount should Ivan report as current assets?

  What is the internal rate of return or IRR for the project

Determine the Net Present Value for Problem 3 with a rate of 10%. Do you proceed or not with the project? What is the internal rate of return or IRR for project

  What is true about permanent life insurance

What is true about permanent life insurance? The cash value of the insurance increases as the premiums accumulate./ It only covers a specific period of time

  How much is the total tax payable before salary

Adam receives annual remuneration of $98,000 and $12,286 per annum in allowable deductions. How much is the total tax payable before salary

  Discuss introduction to international trade

a) Discuss Introduction to international trade and how the internet facilitates international trade.

  Should the asset value in the accounting records be changed

Should the asset value in the accounting records be changed? Explain your answer by including the key principles of the Principle/Convention

  Net operating income in the flexible budget

Galante Kennel uses tenant-days as its measure of activity; an animal housed in the kennel for one day is counted as one tenant-day. During May, Kennel budgeted for 3,000 tenant-days, but its actual level of activity was 2,980 tenant-days. Revenue $1..

  What is the classified statement of financial position

Cash dividends of $360,000 were declared and paid. Dividends paid are treated as financing activities. What is the Classified Statement of Financial Position

  Prepare all entries that are necessary on april

Prepare all entries that are necessary on April 3, 2011. Show a check of the amount recorded for the new cutter. Show the calculation of the amount of the gain

  How much money must you save

You save $40,000 per year for the next 10 years until you retire. How much money must you save in order to earn $50,000 during retirement

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