Calculating Project OCF

Assignment Help Financial Management
Reference no: EM132028708

Calculating Project OCF

Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.9 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be worthless. The project estimated to generate $2,190,000 in annual sales, with costs of $815,000. If the tax rate is 35 percent, what is the OCF for this project? How do I solve this out in excel?

Reference no: EM132028708

Questions Cloud

Determine the after-tax annual worth for alternative : Determine the after-tax annual worth for Alternative 1 and Alternative 2.
Calculate the internal rate of return for machine : Calculate the internal rate of return for a machine that costs $500,000 and provides annual revenue of $115,000 per year for 5 years.
What is the capital structure weight of equity : A. What is the cost of debt? What is the cost of equity? What is the capital structure weight of equity?
Last dollar raised to complete the expansion : What is the WACC for the last dollar raised to complete the expansion?
Calculating Project OCF : The project estimated to generate $2,190,000 in annual sales, with costs of $815,000. If the tax rate is 35 percent, what is the OCF for this project?
Impact from rapid dividend growth on stock current price : The impact from rapid dividend growth on a stock's current price will be:
Wacc for the last dollar raised to complete the expansion : What is the WACC for the last dollar raised to complete the expansion?
According to the black-scholes opm : According to the Black-Scholes OPM, you should hold __________ shares of stock per 100 put options to hedge your risk.
What should be the value of the put : if the effective annual risk-free rate of interest is 4% and there are four months until expiration, what should be the value of the put?

Reviews

Write a Review

Financial Management Questions & Answers

  Annual interest with quarterly compounding

Kindness is a virtue. Consequently, kind people may compete in good activities. Terry and Merry are such people. To help out a cause in five years, Terry decided to deposit $5,000 today into an account earning 8% annual interest (APR) with quarterly ..

  Debt to leverage up its earnings for common stockholders

Firm A is very aggressive in its use of debt to leverage up its earnings for common stockholders, whereas Firm NA is not aggressive and uses no debt.

  What is the companys weighted average cost of capital

SolarTech Inc. is expected to pay a $2.50 dividend at year end, the dividend grows at a constant rate of 5.50% a year, and the common stock currently sells for $67.50 a share. The before-tax cost of debt is 7.50%, and the tax rate is 40%. The company..

  Withdraw in each of the ten years during his retirement

Daniel Silva is 40 years old today. He is planning for his retirement in twenty-five years when he turns 65.For each of the next 25 years, he will be saving $15,000 in his retirement account; the amounts to be saved at the end of each year. How much ..

  European put option on non-dividend-paying stock

Calculate the price of a four-month European put option on a non-dividend-paying stock with a strike price of $60 when the current stock price is $55.

  Exceed required return on less risky stock

By how much does the required return on the riskier stock exceed the required return on the less risky stock?

  What is after-tax salvage value

Today, it is selling this equipment for $29,980. What is the after-tax salvage value if the tax rate is 36 percent?

  What is the company pretax cost of debt

What is the company's pretax cost of debt? If the tax rate is 33 percent, what is the aftertax cost of debt?

  Calculate EBIT-OCF and CFA

You are given the following information for 2014: Sales = $50,000, CoG’s = $15,000, Depreciation = $5000, tax rate = 40%, Net Capital Spending = $15,000, Additions to Net Working Capital = $5000. Calculate EBIT, OCF, and CFA.

  Exceed the required return on the less risky stock

Stock R has a beta of 1, Stock S has a beta of 0.65, the expected rate of return on an average stock is 13%, and the risk-free rate of return is 5%. By how much does the required return on the riskier stock exceed the required return on the less risk..

  Issue new stock to finance its capital budget

Assume that you are an intern with the Brayton Company, and you have collected the following data: The yield on the company's outstanding bonds is 7.75%; its tax rate is 40%; the next expected dividend is $0.65 a share; the dividend is expected to gr..

  Retained earnings versus new common stock

Calculate the cost of retained earnings and the cost of new common stock using the? constant-growth valuation model.

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