Three-year life of the project

Assignment Help Accounting Basics

Reference no: EM131015407

A potential project requires the purchase of $612,000 of equipment. The equipment will be depreciated straight-line to a zero book value over the three-year life of the project. The equipment can be scraped at the end of the project for 45 percent of its original cost. Annual sales from this project are estimated at $418,000 with cash expenses of $287,000. Net working capital equal to 25 percent of sales will be required to support the project. The required return is 12 percent and the tax rate is 35 percent. What is the cash flow in Year 2 of the project?

A. $121,000

B. $154,600

C. $156,550

D. $335,560

E. $296,440

Reference no: EM131015407

Questions Cloud

What is the expected return of the portfolio : You have a portfolio equally invested in Butterfly Hubcaps, Addi Corp and BrianAc€?cs Auto. The expected returns are 5%, 12%, and 17.5%. What is the expected return of the portfolio?

Describe the major categories of tests : Define the term test. Describe the major categories of tests and identify the major uses and users of these tests

What is the issue price per share : What is the issue price per share? What is the pre-money valuation? What is the post-money valuation?

Identify the four steps in hypothesis testing : Identify the four steps in hypothesis testing. Define null hypothesis, alternative hypothesis, level of significance, test statistic, p value, and statistical significance

Three-year life of the project : A potential project requires the purchase of $612,000 of equipment. The equipment will be depreciated straight-line to a zero book value over the three-year life of the project.

Find the mass remaining after fourty days : Find the mass remaining after 40 days. How long does it take the sample to decay to a mass of 2 mg? Skecth the graph of mass function.

What is preferred stock : What is preferred stock and why is it beneficial to corporations? What are the disadvantages of issuing preferred stock from the companyAcs perspective?

In what ways will you apply the principles from this book : Critique: 500-750 words - In what areas do you agree and/or disagree with the author's argument or approach and why? Application 500-750 words - In what ways will you apply the principles from this book to your own life and teaching

Describe the major war aims of the allied powers : Both Indians and Hispanics were hardly "monolithic" ethnic groups in American life. Explain how that led to a variety of responses to the activist currents of the 1960s and 1970s, among both Hispanics and Indians.

User Account

All Pages