2. Problem 12.02 (Project Cash Flow) Colsen Communications is trying to estimate the first year cash flow ( 1 Year 1) for a proposed project. The assets required for the project were fully depreciated at the time of purchase. The finan has collected the following information on the project: Sales revenues $10 million Operating costs Interest expense 2 million The company has a 25% tax rate, and its WACC is 14%. Write out your answers completely. For example, 13 million should be entered as 13,000,000 a. What is the project's operating cash flow for the first year (t-137 Round your answer to the nearest dollar. . If this project would cannibalize other projects by $1.5 million of cash flow before taxes per year, how would this change your answer to part a found your answer to the nearest dolas The Birm's OCF would now be s
2. Problem 12.02 (Project Cash Flow) Colsen Communications is trying to estimate the first year cash flow ( 1 Year 1) for a proposed project. The assets required for the project were fully depreciated at the time of purchase. The finan has collected the following information on the project: Sales revenues $10 million Operating costs Interest expense 2 million The company has a 25% tax rate, and its WACC is 14%. Write out your answers completely. For example, 13 million should be entered as 13,000,000 a. What is the project's operating cash flow for the first year (t-137 Round your answer to the nearest dollar. . If this project would cannibalize other projects by $1.5 million of cash flow before taxes per year, how would this change your answer to part a found your answer to the nearest dolas The Birm's OCF would now be s
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Jk. 196.
Transcribed Image Text:2. Problem 12.02 (Project Cash Flow)
Colsen Communications is trying to estimate the first year cash
has collected the following information on the project:
for a proposed project. The assets required for the project were fully depreciated at the time of purchase. The financial staff
Sales revenues $10 million
Operating costs
million
Interest expense 2 milion
The company has a 25% tax rate, and its WACC is 14%.
Write out your answers completely. For example, 13 million should be entered as 13,000,000
a. What is the project's operating cash flow for the first year (t-137 Round your answer to the nearest dollar
b. If this project would cannibalize other projects by $1.5 million of cash flow before taxes per year, how would this change your answer to part a Round your answer to the nearest dollar
The firm's OCF would now be s
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