Evaluating a project that would require initial investment

Assignment Help Financial Management

Reference no: EM131130823

Fairfax Pizza is evaluating a project that would require an initial investment in equipment of 600,000 dollars and that is expected to last for 7 years. MACRS depreciation would be used where the depreciation rates in years 1, 2, 3, and 4 are 39 percent, 32 percent, 20 percent, and 9 percent, respectively. For each year of the project, Fairfax Pizza expects relevant, incremental annual revenue associated with the project to be 834,000 dollars and relevant, incremental annual costs associated with the project to be 708,000 dollars. The tax rate is 50 percent. What is (X plus Y) if X is the relevant operating cash flow (OCF) associated with the project expected in year 1 of the project and Y is the relevant OCF associated with the project expected in year 4 of the project?

Reference no: EM131130823

Questions Cloud

Why is a balanced diet important to a healthy body and mind : Why is a balanced diet important to a healthy body and mind? What health problems can result when a person eats/exercises too much, or too little? Is Melanie suffering from an eating disorder? Using the disease model of addiction as a foundation, ..

How the ferguson case played out on the political spectrum : Using Rogerian Argument to demonstrate how the Ferguson case in 2014 played out on the political spectrum. - a thesis setting up an exploration of how the tragedy of Ferguson played out across the political spectrum.

Identify the different user groups who require accounting : Do you agree or disagree? Identify the different user groups who require accounting information and explain how this information is provided for them.

What are the total long term contractual commitments : What type of leases, operating or capital, does PepsiCo report? (See Note 9.) Are these leases reported on PepsiCo's financial statements?

Evaluating a project that would require initial investment : Fairfax Pizza is evaluating a project that would require an initial investment in equipment of 600,000 dollars and that is expected to last for 7 years. MACRS depreciation would be used where the depreciation rates in years 1, 2, 3, and 4 are 39 perc..

Discuss the effectiveness of elizabeth i as queen : Discuss the effectiveness of Elizabeth I as queen. How did she handle herself in a predominantly male world? What techniques did she use to rule her country? What were her strengths and weaknesses

What spit might mean in the short story girl : Why do you think Jamaica Kincaid refers to "spit" twice in "Girl"? Provide a metaphorical or literal interpretation for what "spit" might mean in the short story "Girl.

The bonds are callable on any semiannual interest date : Prepare the entry to amortize bond discount and to pay the interest due on July 1, 2011, assuming that interest was not accrued on June 30.

Create a three dimensional representation : Create a three dimensional representation (a model) of the process of using divergent and then convergent then back to divergent thinking.

User Account

All Pages