What net cash flow will the project produce in year 10

Assignment Help Financial Management

Reference no: EM131338289

Bratton Stone Works is considering an expansion proposal that will require an outlay of $1 million for land and $5 million for equipment. The equipment will be depreciated under MACRS rules as a 7-year class asset. The salvage value of the equipment at the end of 10 years is expected to be $1 million. The actual life of the project is expected to be 10 years.

At the end of 10 years, Bratton hopes to sell the land for $1,800,000. Revenues from the project are expected to be $700,000 per year. Operating costs are expected to be $200,000 per year. The ordinary and capital gains tax rate for Bratton is 40 percent. The project will require an additional investment in working capital of $250,000 in year 0 and $150,000 at the end of year 1.

(Hint: See Appendix 9A for information on MACRS depreciation.)

What net cash flow will this project produce in year 10?

Reference no: EM131338289

Questions Cloud

Does the introduction fit the overall paper : Are the main points clear, and are they fully supported by evidence and explanation - How are the evidence and explanation linked to the main point of the paper?

What is the total salt content of seawater as measured : 007527RR- What is the total salt content of seawater as measured in parts per thousand (ppt)? Which of the following is not a natural cause of climatic change? Which statement about supercell storms is false?

Compute the net investment and the net cash flows : The machine will cost $1,000,000.- Compute the net investment (year 0) and the net cash flows for years 1 and 10 for this project.

Reflection on weeks group activity : The assignment is to provide a reflection on this weeks group activity - regrading the consulting of a new business (clothing store) in terms of management and marketing the business.

What net cash flow will the project produce in year 10 : Bratton Stone Works is considering an expansion proposal that will require an outlay of $1 million for land and $5 million for equipment.- What net cash flow will this project produce in year 10?

Upscale designer clothing store : Violet is converting an empty warehouse into an upscale designer clothing store. Your team has been hired to assist Violet in launching her business.

What is the required net investment : Locus Quintatus, Inc., a highly profitable maker of customized chariots, is planning to introduce a new model shortly.- What is the required net investment, and what are the year 1 and year 2 net cash flows?

How is the movement related to black lives matter today : What social problem did the civil rights and black freedom struggles confront, and what did this movement do to try to solve the problem.What impact did the movement have on American society and how did this movement create social change?How is the ..

Write a cosine function that models the movement of the leaf : Write a cosine function that models the movement of the leaf in relationship to the equilibrium point.

User Account

All Pages