Estimated annual operating cash flow from project each year

Assignment Help Financial Management

Reference no: EM131518799

A company is considering a 5-year project to open a new product line. A new machine with an installed cost of $60,000 would be required to manufacture their new product, which is estimated to produce sales of $120,000 in new revenues each year. The cost of goods sold to produce these sales (not including depreciation) is estimated at 54% of sales, and the tax rate at this firm is 30%. If straight-line depreciation is used to calculate annual depreciation, what is the estimated annual operating cash flow from this project each year? (Answer to the nearest dollar.)

Reference no: EM131518799

Questions Cloud

What is the percentage change in the price of this bond : What is the percentage change in the price of this bond if the market yield to maturity rises to 5.7 percent from the current rate of 5.5 percent?

Investors that suffer from a familiarity bias : Investors that suffer from a familiarity bias:

Net working capital resulting from the addition of division : The change in net working capital resulting from the addition of the new division is _____.

Generally not true of integration : Which of the following is generally not true of integration planning? Explain.

Estimated annual operating cash flow from project each year : A company is considering a 5-year project to open a new product line. what is the estimated annual operating cash flow from this project each year?

What is the after tax salvage cash flow for this new machine : what is the after tax salvage cash flow for this new machine at the end of the project?

Determine most economical equipment life to minimize EUAC : Determine the most economical equipment life to minimize the EUAC.

Sold as salvage for an after tax salvage cash flow : It is also estimated that the equipment can be sold as salvage for an after tax salvage cash flow of $5,000 at the end of the project.

Increase in net working capital-what is the free cash flow : The company also had an increase in net working capital of $20 million. What is the free cash flow?

User Account

All Pages