What is the operating cash flow of year for the company

Assignment Help Accounting Basics
Reference no: EM132529185

Question - Pendant Publishing is considering a new product line that has expected sales of $1,100,000 per year for each of the next 5 years. New equipment that is required to produce the new product will cost $1,200,000. The equipment has a useful life of 5 years and a $300,000 salvage value and will be sold at the end of year 5 for its' salvage value. Total variable costs of the product line are $450,000 per year, total fixed costs (not including depreciation) will be an additional $180,000 per year and the initial working capital investment, to buy inventory, will be $15,000. The discount rate (interest rate) for the project is 10% and the company's tax rate is 35%. What is the operating cash flow of year 1 for the company?

A. $305,500

B. $368,500

C. $470,000

D. ($846,500)

Reference no: EM132529185

Questions Cloud

How many units will be produced in april : Inventory policy is 10% of the following month's sales. March 1 beginning inventory is projected to be 1,400 units. How many units will be produced in April?
How much cash will company pay to fund the share dividend : The share issue is to be funded entirely from retained earnings. Each new share is valued at $3. How much cash will the company pay to fund the share dividend
What was the underapplied or overapplied overhead : At the end of last year, the actual DLHs and MOH were 14,800 and $287,120 respectively. What was the underapplied or overapplied overhead for last year?
What can a poor security architect do : Given multivariate, multidimensional events generated by adaptive human agents, perhaps it would not be too far a stretch to claim that no two events are.
What is the operating cash flow of year for the company : The discount rate (interest rate) for the project is 10% and the company's tax rate is 35%. What is the operating cash flow of year 1 for the company
Find what are budgeted cash receipts in may : What are budgeted cash receipts in May? Blue Company has forecast sales to be $410,000 in February, $540,000 in March, $580,000 in April
What is the difference between data analytics vs data mining : There is much discussion regarding Data Analytics and Data Mining. Sometimes these terms are used synonymously but there is a difference.
Describe information presented on statement of cash flows : Describe the information presented on the statement of cash flows. Why is this information important for the stakeholders of a corporation?
What is the amount of the lease receivable : Assuming that Whiterun Ltd does not incur any initial direct costs and that the lease is a finance lease, what is the amount of the lease receivable

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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!

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