Requires initial fixed asset investment

Assignment Help Financial Management
Reference no: EM131611340

H. Cochran, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2,280,000. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $2,210,000 in annual sales, with costs of $1,200,000.

If the tax rate is 35 percent, what is the OCF for this project? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

Reference no: EM131611340

Questions Cloud

Shares of common stock outstanding : Dinklage Corp. has 4 million shares of common stock outstanding. Assume that overall cost of debt is weighted average of that implied by outstanding debt issue.
Describe the key concepts of cloud computing : Webb's Stores is a successful regional retailer that operates stores in Australia and also in New Zealand. Webb's sell a range of food stuffs.
Project to improve its production efficiency : CSM Machine Shop is considering a four-year project to improve its production efficiency.
New seven-octave voice emulation implant : Aria Acoustics, Inc., (AAI) projects unit sales for a new seven-octave voice emulation implant as follows: What is the IRR of the project?
Requires initial fixed asset investment : H. Cochran, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2,280,000.
Requires initial fixed asset investment : H. Cochran, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2,400,000.
Define-software engineering code of ethics : The short version of the code summarizes aspirations at a high level of the abstraction; the clauses that are included in the full version give examples.
Find the book value of the machine : The company uses the straight-line method of depreciation. The book value of the machine at the beginning of the third year would be
How much is cash received from customers for the year : A company reported annual sales revenue of $845,000. How much is cash received from customers for the year

Reviews

Write a Review

Financial Management Questions & Answers

  Should new issue be undertaken based on earnings per share

The Hamilton Corporation has 2 million shares of stock outstanding and will report earnings of $6,790,000 in the current year. The company is considering the issuance of 1 million additional shares which can only be issued at $39 per share. Assume th..

  Calculate the amount of depreciation expense

Smith Corporation reported net income of $200,000 for 2008. Its EBITDA amounted to $800,000 and interest expense was $100,000. Smith‘s corporate income tax rate was 30%. Calculate the amount of depreciation expense that was reported in its income sta..

  Receiving your periodic statement

Suppose that someone stole your ATM card and withdrew $1,000 from your checking account. 65 days after receiving your periodic statement?

  Payoffs have been equalized and riskless hedged investments

Madeline Manufacturing Inc.’s current stock price is $45 per share. Call options for this stock exist that permit the holder to purchase one share at an exercise price of $35. These options will expire at the end of 1 year, at which time Madeline’s s..

  What are the monthly payments that kemo must make

The Kemo Limited company would like to purchase a new office building. It has taken out a $500,000 mortgage loan for 15 years with a quoted APR of 8.4% (with monthly compounding.). What are the monthly payments that Kemo must make?

  Difference between a stock dividend and a stock split

What is the difference between a stock dividend and a stock split?

  Estimate weighted-average cost of capital assuming tax rate

The total market value of Okefenokee Real Estate Company's equity is $6 million, and the total value of its debt is $4 million. The treasurer estimates that the beta of the stock currently is 1.2 and that the expected risk premium on the market is 5%..

  Calculate the expected value of? return

An asset is currently being considered by Perth Industries. Calculate the expected value of? return, r for the asset. Calculate the standard? deviation,sigma Subscript rσr?, for the? asset's returns. Calculate the coefficient of? variation, CV for th..

  According to capital asset pricing theory

According to Capital Asset Pricing theory, in a competitive marketplace which type of risk is rewarded and which kind is not?

  What type of bond is originally issued

What type of bond is originally issued at a 8% coupon bond but the market now requires a 9% yield?

  What was the addition to net working capital

what was the addition to net working capital or NWC?

  The expected return on the market and risk-free rate

the expected return on the market is 15.84 percent, the risk-free rate is 3.8 percent, and inflation is 1.07 percent?

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