What is the annual operating cash flow for this project

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Reference no: EM131853701

1. Andover Engineering is evaluating a project that will increase sales by $2,780,000 and costs by $1,634,000. The project will initially cost $4,200,000 for fixed assets that will be depreciated straight-line to a zero book value over the 10-year life of the project. The applicable tax rate is 34 percent. What is the annual operating cash flow for this project?

$899,160

$726,000

$684,320

$642,916

$568,300

2. The common stock of Chelmsford Chemicals sells for $48.50 a share. The stock is expected to pay $1.40 per share next year when the annual dividend is distributed. Chelmsford Chemicals has established a pattern of increasing its dividends by 5% annually and expects to continue doing so. What is the market rate of return on this stock?

11.14%

7.89%

10.73%

9.51%

8.67%

Reference no: EM131853701

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