What is the operating cash flow for project in year two

Assignment Help Financial Management

Reference no: EM131998093

You are evaluating a project for The Tiff-any golf club, guaranteed to correct that nasty slice. You estimate the sales price of The Tiff-any to be $420 per unit and sales volume to be 1,200 units in year 1; 1,325 units in year 2; and 1,000 units in year 3. The project has a 3-year life. Variable costs amount to $235 per unit and fixed costs are $100,000 per year. The project requires an initial investment of $159,000 in assets, which will be depreciated straight-line to zero over the 3-year project life. The actual market value of these assets at the end of year 3 is expected to be $33,000. NWC requirements at the beginning of each year will be approximately 20 percent of the projected sales during the coming year. The tax rate is 39 percent and the required return on the project is 10 percent. What is the operating cash flow for the project in year 2? Operating cash flow $

Reference no: EM131998093

Questions Cloud

What was its charge for depreciation and amortization : What was its charge for depreciation and amortization?

Net realizable value and calculations based on gross margins : Inventory flow assumptions might include cost, net realizable value and calculations based on gross margins.

Start claiming social security benefits : He wants your advice about whether he should start claiming Social Security benefits as soon as he turns 62 in a few months

What will be its optimal upper cash limit : What will be its optimal upper cash limit? use 365 days a year

What is the operating cash flow for project in year two : The tax rate is 39 percent and the required return on the project is 10 percent. What is the operating cash flow for the project in year 2?

The annuity fund is offering return : James inherited an annuity worth $4653.59 from his uncle. The annuity will pay him six equal payments of $1,100 at the end of each year.

Retirement account by the time you retire : You want to have 1,000,000 dollars in a retirement account by the time you retire.

What is the rate of inflation : You have 4120 in your account today and earned a real interest rate of 2.6% What is the rate of inflation?

The least-expensive car for new delivery service : You are trying to pick the least-expensive car for your new delivery service.

User Account

All Pages