Kelly corporation is considering an investment proposal

Reference no: EM13576415

Kelly Corporation is considering an investment proposal that requires an initial investment of $150,000 in equipment. Fully depreciated exisitng equipment may be disposed of for $40,000 pre-tax. The proposed project will have a five year life, and is expected to produce additional revenue of $65,000 per year. Expenses other than depreciation will be $15,000 per year. The new equipment will be deprciated to zero over the five-year useful life, but is expected to actually be sold for $20,000. Kelly has a 35% tax rate.

a) What is the net initial outlay for the proposed project?
b) What is the operating cash flow for years 1-4
c) What is the total cash flow at the end of year 5(operating cash flow for year 5 plus terminal cash flow)?

Reference no: EM13576415

Questions Cloud

Mars car company has a capital structure made up of 40 debt : mars car company has a capital structure made up of 40 debt and 60 equity and a tax rate of 30. a new issue of 1000 par

A continuous random variable measuring temperature of an : a continuous random variable measuring temperature of an object is known to have mean of 78 degrees celcius with

Someone owns a mutual fund that reinvests dividends and : someone owns a mutual fund that reinvests dividends and capital gains earned during the year. the mutual fund reported

A continuous random variable is normally distributed with : a continuous random variable is normally distributed with mean of 175 and standard deviation of 18. according to the

Kelly corporation is considering an investment proposal : kelly corporation is considering an investment proposal that requires an initial investment of 150000 in equipment.

They are mutually exclusive and project risk has been : project x is very risky and has an npv of 3 million. project y is very safe and has an npv of 2.5 million. they are

What minimum sample size of randomly selected pregnancies : what minimum sample size of randomly selected pregnancies should you select?your criteria changed you randomly sample

Using the alphabetical list of account balances presented : using the alphabetical list of account balances presented below all of which are normal prepare a trial balance for

Pdf corp needs to replace an old lathe with a new more : pdf corp. needs to replace an old lathe with a new more efficient model. the old lathe was purchased for 50000 nine

User Account

All Pages