What is the year two operating cash flow

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Reference no: EM132054030

1. As a member of Gamma Corporation's financial staff, you must estimate the Year 1 operating net cash flow for a proposed project with the following data. What is the Year 2 operating cash flow?

EBT: $12,000

Depreciation: $3,500

Interest Expense: $1,000

Tax Rate: 40%

2. A firm has undertaken a feasibility study to evaluate a project that has the following estimated cashflows:

Increased sales to business of $140,000 for the next 5 years (starting in one year's time)Increased costs of $20,000 for the next two years (starting in one year's time)The initial capital expenditure required is $100,000.The study cost $10,000 to conduct.

-Amount borrowed to fund project is $200,000 with interest of 8% pa paid yearly.

If the firm is facing a discount rate of 10%, what is the NPV of this project?

a. $395,999

b. $516,155

c. $455,420

d. $506155

Reference no: EM132054030

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