Determine what is the operating cash flow for each year

Assignment Help Finance Basics

Reference no: EM13336072

Hollister & Hollister is considering a new project. The project will require $522,000 for new fixed assets, $218,000 for additional inventory, and $39,000 for additional accounts receivable. Short-term debt is expected to increase by $165,000. The project has a 6-year life. The fixed assets will be depreciated straight-line to a zero book value over the life of the project. At the end of the project, the fixed assets can be sold for 20 percent of their original cost. The net working capital returns to its original level at the end of the project. Their $130,000 marketing study suggests that the project will generate annual sales of $875,000 and costs of $640,000. The tax rate is 34 percent and the required rate of return is 14 percent. What is the operating cash flow for each year? What is the payback period, discounted payback period. What is NPV (2%-20%) What is IRR?

Reference no: EM13336072

Questions Cloud

How to compute the price of loan in two cases : Consider a firm that can invest $250 right now, at t=0 in a project that will yield a single cash flow one period hence, at t=1. This $250 investment will be raised by issuing unsecured debt at t=0.

Describe a forecasting model : Describe a forecasting model justifying its selection over other techniques, and project attendance through 2009.

What must be the moment of inertia of the turntable : You need to design an industrial turntable that is 50.5 cm in diameter and has a kinetic energy of 0.205 J when turning at 42.0 rpm, What must be the moment of inertia of the turntable about the rotation axis

Assume a steady state operation : Selecting the right product mix: a factory has 3 machines (M1, M2 and M3) and it manufactures two products (P and Q). The demand for both the products is far greater than the capacity of the factory: Market price for P is $30 per unit, and $40 per un..

Determine what is the operating cash flow for each year : Hollister & Hollister is considering a new project. The project will require $522,000 for new fixed assets, $218,000 for additional inventory, and $39,000 for additional accounts receivable.

Address to satisfy the employees-stockholders-customers : You own a company. You have just been tasked with making the company more socially responsible. What issues must you address to satisfy the employees, stockholders, customers, and community? What procedures should you put in place for the company to ..

Find the angle through which the blade has turned : A circular saw blade 0.200 m in diameter starts from rest. Find the angular acceleration and the angle through which the blade has turned

How much will the sheehans health insurance company pay : How much will the Sheehans' health insurance company pay if Sandra files a claim for a broken foot that cost $2,000 for emergency room treatment, $700 for bone setting, and $300 in rehabilitation services

What was its acceleration as it slowed down : At t = 0 a grinding wheel has an angular velocity of 25.0 rad/s. It has a constant angular acceleration of 21.0 rad/s2 until a circuit breaker trips at t = 1.81 s. What was its acceleration as it slowed down

User Account

All Pages