What is the project total nominal cash flow from assets

Assignment Help Financial Management

Reference no: EM131831076

Etonic Inc. is considering an investment of $376,000 in an asset with an economic life of 5 years. The firm estimates that the nominal annual cash revenues and expenses at the end of the first year will be $256,000 and $81,000, respectively. Both revenues and expenses will grow thereafter at the annual inflation rate of 2 percent. The company will use the straight-line method to depreciate its asset to zero over five years. The salvage value of the asset is estimated to be $56,000 in nominal terms at that time. The one-time net working capital investment of $15,500 is required immediately and will be recovered at the end of the project. The corporate tax rate is 34 percent. What is the project’s total nominal cash flow from assets for each year?

Reference no: EM131831076

Questions Cloud

They set aside today to cover the cost of college : How much money must they set aside today to cover the cost of college?

Bottles of drinking water each year in perpetuity : Sparkling Water, Inc., expects to sell 2.86 million bottles of drinking water each year in perpetuity.

What is the npv of the decision to keep the old machine : A firm is considering investment in new machine with price of $18.04 million to replace its existing machine. What is NPV of the decision to keep old machine?

Cash flow analysis is setting the bid price on project : Another utilization of cash flow analysis is setting the bid price on a project. what bid price per carton should you submit?

What is the project total nominal cash flow from assets : The corporate tax rate is 34 percent. What is the project’s total nominal cash flow from assets for each year?

Considering offer to buy equity in start-up company : An investor is considering an offer to buy equity in a start-up company. How much can he pay today for this opportunity to receive his return?

Income statement and balance sheet : The following items and amounts were taken from Sheffield Corp.’s 2017 income statement and balance sheet.

Living large on the french rivera in retirement : A jet-setting lawyer plans on living large on the French Rivera in retirement.

Quarterly payment amount for the refinanced loan : What are the monthhy payment amount for the original loan and the quarterly payment amount for the refinanced loan?

User Account

All Pages