Estimate first-year cash flow for proposed project

Assignment Help Financial Management

Reference no: EM131552396

Project cash flow Colsen Communications is trying to estimate the first-year cash flow (at Year 1) for a proposed project. The financial staff has collected the following information on the project: Sales revenues $10 million Operating costs (excluding depreciation) 7 million Depreciation 2 million Interest expense 2 million The company has a 40% tax rate, and its WACC is 13%. Write out your answers completely. For example, 13 million should be entered as 13,000,000. What is the project's cash flow for the first year (t = 1)? Round your answer to the nearest dollar. $ If this project would cannibalize other projects by $1 million of cash flow before taxes per year, how would this change your answer to part a? Round your answer to the nearest dollar. The firm's project's cash flow would now be $ . Ignore part b. If the tax rate dropped to 35%, how would that change your answer to part a? Round your answer to the nearest dollar. The firm's project's cash flow would by $ .

Reference no: EM131552396

Questions Cloud

Use any test to determine whether the series is absolutely : Use any test to determine whether the series is absolutely convergent, conditionally convergent, or divergent.

Find the capacitance of a parallel plate capacitor : Find the capacitance of a parallel plate capacitor if the area of each plate is 0.075 m2 and the distance between the plates is 1.77 mm. The dielectric is air.

Evaluating capital budgeting project : Depreciation methods Charlene is evaluating a capital budgeting project that should last for 4 years. Which depreciation method would produce the higher NPV?

What is the equipment after-tax salvage value : Karsted can sell the used equipment today for $6.75 million, and its tax rate is 30%. What is the equipment's after-tax salvage value?

Estimate first-year cash flow for proposed project : Project cash flow Colsen Communications is trying to estimate the first-year cash flow (at Year 1) for a proposed project.

Company is analyzing two mutually exclusive projects : A company is analyzing two mutually exclusive projects, S and L, with the following cash flows: What is the IRR of the better project?

Find the work done by the force field f : Find the work done by the force field F (x,y,z) = (x-y2 y-z2, z-x2) on a particle that moves along the line segment (0,0,1) to (2,1,0).

Should the new lease be accepted : At what nominal WACC would the store owner be indifferent between the two leases? Should the new lease be accepted?

What is the intrinsc price of the stock : What is the intrinsc price of the stock if the growth is constant and the stock's required rate of return is 10%?

User Account

All Pages