Calculating the annual operating cash flows

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1. You are considering buying a new, $15,000 car, and you have $2,000 to put toward a down payment. If you can negotiate an interest rate of 12% and finance the car over 60 months, what are your monthly car payments?

2. You are currently investing your money in a bank account that has a nominal annual rate of 10.5%, compounded monthly. How many months and how many years will it take for you to double your money?

3. Why is depreciation added back subtracted before taxes are calculated, then added back when calculating the annual operating cash flows:

A. Because Depreciation can drive the company into bankruptcy

B. Because Depreciation is irrelevant in this calculation

C. because depreciation is harmless.

 

D. Because Depreciation is a non-cash expens

Reference no: EM132049205

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