Precise machinery is analyzing proposed project

Assignment Help Financial Management

Reference no: EM131609667

Precise Machinery is analyzing a proposed project. The company expects to sell 2,100 units, give or take 5 percent. The expected variable cost per unit is $260 and the expected fixed costs are $589,000. Cost estimates are considered accurate within a plus or minus 4 percent range. The depreciation expense is $129,000. The sales price is estimated at $750 per unit, give or take 2 percent. The tax rate is 35 percent. The company is conducting a sensitivity analysis on the sales price using a sales price estimate of $755. What is the operating cash flow based on this analysis?

?A. ?$293,089

B. ?$368,015

C?. $337,975 ?

D. $86,675

?E. $354,874

Reference no: EM131609667

Questions Cloud

Preparing an analysis of investment opportunity for client : Assume that you are investment analyst preparing analysis of investment opportunity for client. Is this an investment that should be considered? Explain.

Growth rate in stock dividends and the cost of equity : If the firm is expected to provide a constant annual rate of growth in? dividends, what rate of growth must the firm? experience?

Individual or component costs of capital : ?(Individual or component costs of capital?) Compute the costs for the sources of? financing.

Determine the present worth of project : The initial cost to expand the facility is currently estimated to be. Determine the present worth of this project.

Precise machinery is analyzing proposed project : Precise Machinery is analyzing a proposed project. What is the operating cash flow based on this analysis?

What is your incremental cash flow from selling the? machine : what is your incremental cash flow from selling the? machine?

Calculate the cost of internal common equity : Calculate the cost of internal common equity and external common equity.

Salary arrangements-what is present value of second option : They’ve offered you two different salary arrangements. What is the present value of the second option?

Compute the discounted payback statistic for project : Compute the discounted payback statistic for Project D if the appropriate cost of capital is 13 percent and the maximum allowable discounted payback is four yea

User Account

All Pages