What is the operating cash flow for project

Assignment Help Financial Management

Reference no: EM132055961

1) Jefferson & Sons is evaluating a project that will increase annual sales by $145,000 and annual cash costs by $94,000. The project will initially require $110,000 in fixed assets that will be depreciated straight-line to a zero book value over the 4-year life of the project. The applicable tax rate is 32 percent. What is the operating cash flow for this project?

2) The Lumber Yard is considering adding a new product line that is expected to increase annual sales by $238,000 and cash expenses by $184,000. The initial investment will require $96,000 in fixed assets that will be depreciated using the straight-line method to a zero book value over the 6-year life of the project. The company has a marginal tax rate of 32 percent. What is the annual value of the depreciation tax shield?

Reference no: EM132055961

Questions Cloud

Credit card-sbartering be most likely to become inefficient : Melissa has several credit cards, as well as a debit card. In which of the following scenarios would bartering be most likely to become inefficient?

Relying on his report in deciding whether to buy stock : What are the potential advantages and disadvantages in relying on his report in deciding whether to buy the stock?

Borrow money-what is the value of the payments today : A friend wants to borrow money from you. The interest rate is 4.8 percent compounded semiannually. What is the value of the payments today?

Net present value of project given required return : What is the net present value of this project given a required return of 14.5 percent?

What is the operating cash flow for project : The applicable tax rate is 32 percent. What is the operating cash flow for this project?

Shopsmart plc using fcff valuation approach : Generate the twelve month forward price target for ShopSmart Plc using FCFF valuation approach and state and justify your investment recommendation for stock.

Lending and borrowing both take place at the risk-free rate : Determine the return on the portfolio assuming lending and borrowing both take place at the risk-free rate.

Determine internal rate of return : Home Security Systems is analyzing the purchase of manufacturing equipment that will cost $92,000. Determine the internal rate of return.

Investment portfolio containing three different assets : You are contemplating a $200,000 investment portfolio containing three different assets.

User Account

All Pages