Minimum annual cash flow required to accept the project

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Reference no: EM132040804

1. A project with an initial investment of $436,100 will generate equal annual cash flows over its 11-year life. The project has a required return of 7.8 percent. What is the minimum annual cash flow required to accept the project?

$60,495.89

$69,138.17

$55,659.65

$64,406.68

$57,578.95

2. A 4-year project has an annual operating cash flow of $53,500. At the beginning of the project, $4,450 in net working capital was required, which will be recovered at the end of the project. The firm also spent $22,800 on equipment to start the project. This equipment will have a book value of $4,820 at the end of the project, but can be sold for $5,790. The tax rate is 35 percent. What is the Year 4 cash flow?

$61,714

$54,501

$20,633

$64,080

$63,401

Reference no: EM132040804

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