Estimated annual operating cash flow from project each year

Assignment Help Financial Management
Reference no: EM131617091

A company is considering a 5-year project to open a new product line. A new machine with an installed cost of $100,000 would be required to manufacture their new product, which is estimated to produce sales of $70,000 in new revenues each year. The cost of goods sold to produce these sales (not including depreciation) is estimated at 46% of sales, and the tax rate at this firm is 39%. 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: EM131617091

Questions Cloud

They applied to the loan company for the maximum loan : A couple wishes to borrow money using the equity in their home for collateral. they applied to the loan company for the maximum loan.
What is the net present value of this project : A company is considering a 6-year project that requires an initial outlay of $27,000. what is the net present value (NPV) of this project?
How much must he deposit in an account today : How much must he deposit in an account today if he wants to receive $2,100 at the beginning of each of the next seven years?
What is the net present value of this project : A company is considering a 3-year project that requires an initial installed equipment cost of $11,000. what is the net present value (NPV) of this project?
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 would be a fair price for this stock today : you expect dividend to grow 5% per year indefinitely into future. If required rate of return is 12% per year, what would be a fair price for this stock today?
How much does he need to borrow to purchase the house : How much does he need to borrow to purchase the house?
Implied volatility is a forward-looking estimate : Owning options is said to be being "long volatility". Implied volatility is a forward-looking estimate.
Determine payback and net present value : Determine Payback, Net Present Value (NPV) , Internal Rate of Return( IRR) , Profibility Index (PI)

Reviews

Write a Review

Financial Management Questions & Answers

  What is effective cost. sales based on year

Grunewald Industries sells on terms of 2/10, net 40. Gross salse last year were $4,562,500 and accounts recivable averaged $437,500. Half of customers paid on the 10th day and took discount. Another half on 40th day. What is effective cost. Sales bas..

  If provides an annual expected return

After contemplating the risk of Petscan stock, Gail is willing to hold the stock only if it provides an annual expected return of at least 13 percent. Should she buy Petscan shares or not?

  Discount rate and the future cash flow of each project

Internal rate of return and modified internal rate of return. Quark Industries has three potential projects, all with an initial cost of $1,600,000. Given the discount rate and the future cash flow of each project, what are the IRRs and MIRRs of the ..

  What was firm cash flow to creditors

What was the firm’s cash flow to creditors during 2015? What was the firm’s 2015 operating cash flow, or OCF?

  How does collateral mortgage obligation work

Who wins and who loses when mutual funds agitate for maximum recovery? How does CMO ( Collateral mortgage obligation) work?

  The management fee

Calculate the management fee Mike must pay this year.

  Here are some of the financial ratios from annual report

Orlando Imaging Center Corporation (OICC) had net income in 2016 of $90,000. Here are some of the financial ratios from the annual report.

  Units of inventory does the company order in one shipment

A company has performed an inventory analysis and has found that on average it holds 8 000 units of inventory, including safety stock of 2000 units. How many units of inventory does the company order in one shipment? What would be the total inventory..

  How much should you pay for the investment today

Suppose an investment will pay $1,000 ten years from now. If you can earn 6% annual rate by depositing your money in a bank, how much should you pay for the investment today?

  Shares of stock outstanding-market capitalization

Apple Inc. has 5.25 billion shares of stock outstanding. the market capitalization of Apple Inc. is

  What is the intrinsic value of this stock

LA Diversified Inc. recently paid its annual dividend ($3.00). Dividends have consistently grown at a rate of 3.80%. The stock has a beta of 0.88. The current risk-free rate is 2.40% and the market risk premium (RM - RF) is 8.50%. Assuming that CAPM ..

  About the invested funds

Your uncle has $500,000 and wants to retire. He expects to live for another 30 years and to earn 6.5% on his invested funds. How much could he withdraw at the end of each of the next 30 years and end up with zero in the account?

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