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Calculating Project Cash Flow from Assets
Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $6.48 million. The fixed asset will be depreciated straight-line to zero over its 3-year tax life, after which time it will have a market value of $504,000. The project requires an initial investment in net working capital of $720,000. The project is estimated to generate $5,760,000 in annual sales, with costs of $2,304,000. The tax rate is 32 percent and the required return on the project is 16 percent.
What is the project's year 0 cash flow? Year 1 cash flow? Year 2 cash flow? Year 3 cash flow? NPV?
College tuition has been rising at a rate of 7% per year. Currently the average tuition of a state college is $10,600 per year. Andrea's son Trevor will begin college in 9 years. Andrea's portfolio is making 2% annually. How much does Andrea need to ..
A small business owner visits her bank to ask for a loan. The owner states that she can repay a loan at $1,300 per month for the next three years and then $2,600 per month for two years after that. If the bank is charging customers 8.25 percent APR, ..
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Elizabeth’s Debt Payment/Income ratio is:
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