What will be the net cash flow for year one of this project

Assignment Help Finance Basics
Reference no: EM13280630

Your company has spent $270,000 on research to develop a new computer game. The firm is planning to spend $47,000 on a machine to produce the new game. Shipping and installation costs of the machine will be capitalized and depreciated; they total $5,700. The machine has an expected life of 10 years, a $32,000 estimated resale value, and falls under the MACRS 15-Year class life. Revenue from the new game is expected to be $370,000 per year, with costs of $170,000 per year. The firm has a tax rate of 30 percent, an opportunity cost of capital of 12 percent, and it expects net working capital to increase by $57,000 at the beginning of the project. What will be the net cash flow for year one of this project?

Reference no: EM13280630

Questions Cloud

What will happen to the price of the bond : A $5000 bond with a coupon rate of 5.4% paid semiannually has five years to maturity and a yield to maturity of 7.5%. If interest rates falls and the yield to maturity decreases by 7.8% , what will happen to the price of the bond?
Calculate the resistivity of intrinsic si and room temp t : A Si wafer is doped with Na = 5x10^16 /cm^3 of acceptors. In equilibrium at T=330K calculate, list the following for the Si wafer: Eg (Energy gap), ni (intrinsic concentration), n,p - the free electron and hole concentrations
What will be the current value of a single share : Spacefood products will pay a dividend of $2.40 per share this year. It is expected that this dividend will grow by 3% per year each year in the future. What will be the current value of a single share of Spacefood's stock if the firm's equity cos..
What will be the current value of a single share : Spacefood products will pay a dividend of $2.40 per share this year. It is expected that this dividend will grow by 3% per year each year in the future. What will be the current value of a single share of Spacefood's stock if the firm's equity cos..
What will be the net cash flow for year one of this project : The firm has a tax rate of 30 percent, an opportunity cost of capital of 12 percent, and it expects net working capital to increase by $57,000 at the beginning of the project. What will be the net cash flow for year one of this project?
What is the power delivered by a motor for this ascend : An elevator with a mass of 1000 kg, including passengers, is ascending at constant speed. What is the power delivered by a motor for this ascend
Probability that their first child will have a tail : What is the probability that their first child will have a tail and what proportion of their offspring is expected have achondroplasia?
What is the expected capital gain from the sale : Credenza Industries is expected to pay a dividend of $1.20 at the end of the coming year. It is expected to sell for $62.00 at the end of the year. If its equity cost of capital is 8%, what is the expected capital gain from the sale of this stock ..
Find the weight of the automobile : The four tires of an automobile are inflated to a gauge pressure of 1.9 multiply.gif 105 Pa. Determine the weight of the automobile

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the value of the option to delay the project

The project's cost and expected annual cash flows would be the same whether the project is delayed or not. The project's WACC is 11.0%. What is the value (in thousands) of the option to delay the project?

  Objective type questions on capital structure

Objective type questions on cost of capital and capital structure and Which one of the following means of management compensation is designed to help eliminate the agency problem

  Which variable most impacts profitability

Conduct a sensitivity analysis by allowing investment, sales, variable costs, and fixed costs to vary by PLUS 10% and MINUS 10% from their original estimates. Which variable most impacts profitability?

  Would a supply chain make sense in regional production

Would a supply chain make sense in regional production as backup facilities to China? For example, having facilities in Europe and South America to become cost effective in competition with Asia should a disaster strike? Explain.

  Eva analysis

Using an EVA analysis, should Laidlaw acquire the new piece of equipment?

  Should the firm accept or reject the project

If Yurdone requires a return of 10 percent on such undertakings, should the firm accept or reject the project?

  What is capital budgeting

What is Capital budgeting and assess the conclusions we might make about the wisdom of undertaking this project

  Should the company continue to manufacture product a

If it does so, unit sales would remain unchanged and $5of the$9 per unit costs assigned to Product A would be eliminated . Should the company continue to manufacture Product A or purchase Product B for resale?

  What is the value of brushy mountains stock

As a result, the company's earnings and dividends are declining at the constant rate of 5% per year. If D0 = $6 and rs = 18%, what is the value of Brushy Mountain's stock? Round your answer to the nearest cent.

  Find annual savings for community hospital

Community Hospital has yearly net patient revenues of 150 million dollar. At present time, payments received by the hospital are not deposited for six days on average.

  Calculate u d, and p for a two-step tree

Consider a European call option on a non-dividend-paying stock where the stock price is $40, the strike price is $40, the risk-free rate is 4% per annum, the volatility is 30% per annum, and the time to maturity is six months.

  Estimate the company net income

If a company can expect an extra $2 million in sales if it enters a new market and it knows that 15 percent of its sales will be uncollectible, collection costs will be 2 percent on all new sales,

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