What is the operating cash flow for year four

Assignment Help Financial Management

Reference no: EM131054664

ABC Company has a proposed project that will generate sales of 284 units annually at a selling price of $298 each. The fixed costs are $6,914 and the variable costs per unit are $117. The project requires $24,187 of equipment that will be depreciated on a straight-line basis to a zero book value over the 4-year life of the project. That is, depreciation each year is $24,187/4. The salvage value of the fixed assets is $6,900 and the tax rate is 26 percent. What is the operating cash flow for year four?

Reference no: EM131054664

Questions Cloud

The price-earnings ratio and the price-book value ratio : Look up a publicly traded company of your choice (look under the investor section of their website or go to free Edgar online to get information) and calculate: a. The price/earnings ratio b. The price/book value ratio c. The price/revenue ratio Note..

What are the operating cash flows : ABC Inc. has estimated the following revenues and expenses related phase I of a proposed new housing development? Incremental sales= $6,335,814, total cash expenses $3,212,642, depreciation $388,125, taxes 29%, interest expense, $200,000. What are th..

What is value of the stock if the appropriate discount rate : Doctors-On-Call, a newly formed medical group, just paid a dividend of $.50. The company's dividend is expected to grow at a 20% rate for the next 5 years and at a 3% rate thereafter. What is the value of the stock if the appropriate discount rate is..

What is the operating cash flow for year four : ABC Company has a proposed project that will generate sales of 284 units annually at a selling price of $298 each. The fixed costs are $6,914 and the variable costs per unit are $117. The project requires $24,187 of equipment that will be depreciated..

Fixed assets will be depreciated to zero book value : A project has an initial requirement of $229,025 for new equipment and $9,004 for net working capital. The fixed assets will be depreciated to a zero book value over the 3-year life of the project and have an estimated salvage value of $82,095. All o..

Equipment that is classified as seven-year property : A project requires $353,268 of equipment that is classified as 7-year property. What is the book value of this asset at the end of year 3 given the following MACRS depreciation allowances, starting with year one: 14.29, 24.49, 17.49, 12.49, 8.93, 8.9..

The market return on similar bonds : BioMax Inc. offers a 10 percent coupon bond that has a $1,000 par value, semiannual coupon payments and 20 years of its original 25 years left to maturity. Which of the following statements is true if the market return on similar bonds is 8.5%?

What if rates suddenly fall by two percent instead : Bond J has a coupon rate of 4 percent and Bond K has a coupon rate of 10 percent. Both bonds have 13 years to maturity, make semiannual payments, and have a YTM of 7 percent. If interest rates suddenly rise by 2 percent, what is the percentage price ..

User Account

All Pages