User Account

All Pages

What are the net operating cash flows

Assignment Help Finance Basics
Reference no: EM132055671

Problem: New-Project Analysis

The president of the company you work for has asked you to evaluate the proposed acquisition of a new chromatograph for the firm's R&D department The equipment's basic price is $100,000, and it would cost another $15,000 to modify it for special use by your firm. The chromatograph, which falls into the MACRS 3-year class, would be sold after 3 years for $45,000. Use of the equipment would require an increase in net working capital (spare parts inventory) of $5,000. The machine would have no effect on revenues, but it is expected to save the firm $40,000 per year in before-tax operating costs, mainly labor. The firm's marginal federal-plus-state tax rate is 35%.

What is the Year-0 net cash flow? If the answer is negative, use minus sign. $

What are the net operating cash flows in Years 1, 2, and 3? Round your answers to the nearest dollar.

Year 1 $

Year 2 $

Year 3 $

What is the additional (nonoperating) cash flow in Year 3? Round your answer to the nearest dollar. $

Reference no: EM132055671

Questions Cloud

Consider a diploid snail species that has 34 chromosomes : Consider a diploid snail species that has 34 chromosomes (2n = 34).
How much external equity must coastal carolina seek : Coastal Carolina Heating and Cooling Inc. has a 6-month backlog of orders for its patented solar heating system. To meet this demand, management plans.
Black and white alleles : A farmer crosses a black rooster with a white hen. Of the seven offspring, three are black, three are speckled black and white, and one is white.
Dimensional computerized car-styling system : An automaker is considering installing a three-dimensional (3-D) computerized car-styling system at a cost of $276,000.
What are the net operating cash flows : The president of the company you work for has asked you to evaluate the proposed acquisition of a new chromatograph for the firm's R&D department.
Effective annual rate is going to higher than nominal rate : Effective annual rate is going to be higher than nominal rate if-
Identify biblical scripture used by slave owners to justify : What are some of the moral questions that slavery obligated the evangelical church to answer?
Why do type 2 diabetes occurs so much more : Why do type 2 diabetes occurs so much more often than other inheritable diseases?
Review stock repurchase problem in detail : Gamma Industries has net income of $1,600,000, and it has 1,170,000 shares of common stock outstanding. The company's stock currently trades at $64 a share.

Reviews

Write a Review

Finance Basics Questions & Answers

  Percent rate of return on similar investments

1. Bunky's Eats recently paid $1.65 as an annual dividend. Future dividends are projected at $1.68, $1.72, $1.76, and $1.80 over the next four years, respectively. In year 5, the dividend is expected to increase by 2.5 percent annually. What ..

  Mark deposit today to ensure

Mark wants to withdraw $6,500 at the end of three years and $8,000 at the end of five years. He wants to do this in such a way that the account balance drops to zero after the last withdrawal. Assuming that the interest rate is 5%, how much money ..

  How much of the judgment would the insurance cover

Becky Fenton has 90/180/100 automobile insurance coverage. If two other people are awarded $135,000 each for injuries in an auto accident in which Becky.

  Find operating cash flow using given data

ABC, Inc. is considering the purchase of new equipment. The annual sales are expected to be $496,065, the annual variable costs are expected to be $104,366.

  Wat amount should an investor be willing to pay for a

bond value. what amount should an investor be willing to pay for a 1000 5-year united states government bond which

  Prepare the company trial balance using given data

Prepare the company's trial balance as of June 30, 2012, listing accounts in proper sequence, as illustrated in the chapter.

  What is the value per share of your firm stock

1. Your company has a required rate of return 7%. The company has completed a new project that is expected to grow dividends at a rate of 50% the first year and 25% the following year, after which growth should be at a constant rate of 6%. ..

  What will net increase or decrease in the annual flotation

The amortization of flotation costs reduces taxes, and thus provides an annual cash flow. What will the net increase or decrease in the annual flotation cost tax savings be if refunding takes place?

  What is the value of cash flow stream at the end of year 5

Consider an uneven cash flow stream: Year Cash Flow 0. $2,000 1.  2,000 2. 0 3. 1,500 4. 2,500 5. 4,000 a. What is the present (Year 0) value of the cash flow stream if the opportunity cost rate is 10 percent? b. What is the value of the cash flow st..

  How much will you have 4 years from today

You want to quit your job and go back to school for a law degree 4 years from now, and you plan to save $3,500 per year, beginning immediately. You will make 4 deposits in an account that pays 5.7% interest.

  Find out the project equivalent annual cost

A five-year project has an initial fixed asset investment of $355,000, an initial NWC investment of $39,000, and an annual OCF of -$38,000. The fixed asset is fully depreciated over the life of the project and has no salvage value. If the required..

  Ethical and regulatory issues

If you were a financial manager, what specific strategies would you undertake to mitigate risks in the changes in value of the euro against the dollar? What ethical and regulatory issues would influence your decisions?

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd