What is the total cash flow of year for the company

Assignment Help Accounting Basics
Reference no: EM132529205

Question - Rick Barr Inc. is considering a new product line that has expected sales of $500,000 per year for each of the next 5 years. New equipment that is required to produce the new product will cost $800,000. The equipment has a useful life of 5 years and an $80,000 salvage value and will be sold at the end of year 5 for its salvage value. Total variable costs of the product line are $230,000 per year, total fixed costs (not including depreciation) will be an additional $100,000 per year and the initial working capital investment, to buy inventory, will be $10,000. The discount rate (interest rate) for the project is 10% and the company's tax rate is 35%. What is the total cash flow of year 5 for the company?

A. $160,900

B. $240,900

C. $250,900

D. $256,750

Reference no: EM132529205

Questions Cloud

What adjusting entry must you record december : Your firm holds a $15,000, 8% note receivable issued on August 1, 20X0. What adjusting entry must you record December 31, 20X6
Create journal entry to record the incurrence of production : Create journal entries to record the incurrence of production costs, completion of job number A26 and the shipment of 900 cuddly koalas.
Identify a computer system you have recently had experience : For this assignment, you will identify a computer system you have recently had experience with and prepare an attach a PowerPoint presentation (8-10 slides).
What controls can be implemented to prevent or detect fraud : What controls can be implemented to prevent or detect the fraud? A city health inspector threatens to close down a restaurant.
What is the total 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 total cash flow of year 5 for the company
Discuss the concept of a value chain : Explanation of the role of each segment and explain how a retailer could focus on the purchasing segment of their value chain to create competitive advantage.
Discuss a relevant issue regarding log file auditing : Introduce and discuss a relevant issue regarding Log File Auditing. Introduce and discuss a relevant issue regarding Backup Strategies.
Find unit cost per can of soup transferred to finished goods : Find The unit cost per can of soup transferred to the finished goods warehouse during March was? The product costs to deducted from revenue in August amount to
What is the amount of Riverwood Ltd first year : The interest rate implicit in the lease for Riverwood Ltd is 5%. What is the amount of Riverwood Ltd's first year's interest expense

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