A corporation has annual sales of $1,500,000 and costs of $698,000 in the first year. A plant is installed at a cost of $1,200,000. It will be depreciated straight line to zero in its useful life of 4 years. The tax rate is 35%. Calculate the operating cash flow for the first year. A. $326,300 B. $521,300 C. $626,300 CCOE 200

A corporation has annual sales of $1,500,000 and costs of $698,000 in the first year. A plant is installed at a cost of $1,200,000. It will be depreciated straight line to zero in its useful life of 4 years. The tax rate is 35%. Calculate the operating cash flow for the first year. A. $326,300 B. $521,300 C. $626,300 CCOE 200

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

Problem 1PS

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A8
3. An investment of $500,000 generates an annual income of$150,000 over the next4 years with a salvage value of$200,000. At MARR-10% is this a good investment (by computing P.W. factor)?, The effective tax rate is 40% and MACRS depreciation with depreciation life of 3 years is employed. The present worth of this investment is:
K- (Calculating changes in net operating working capital) Duncan Motors is introducing a new product and has an expected change in net operating income of $315,000. Duncan Motors has a 32 percent marginal tax rate. This project will also produce $54,000 of depreciation per year. In addition, this project will cause the following changes in year 1 Without the Project Accounts receivable $31.000 Inventory 27,000 Accounts payable 55.000 (Click on the soon in order to copy its contents into a spreadsheet) What is the project's free cash flow in year 17 The free cash flow of the project in year 1 is $ With the Project $20,000 44,000 61,000 (Round to the nearest dollar)
provide answer please
4. A project capitalized for ₱150,000 invested in depreciable assets will earn a uniform, annual income of ₱59, 547 in 10 years. The costs for operation and maintenance total ₱27,000a year, and taxes and insurance will cost 4% of the first cost each year. If the company expects its capital to earn12% before income taxes, is the investment worthwhile? Show by: Annual cost method Solve and show the solution.
Subject: acounting
At the end of a capital project the equipment has been fully depreciated and is sold for $30,000. Working capital in the amount of $10,000 is also no longer needed for the project and converted to cash. The company's tax rate is 40%.What is the total terminal cash flow for this project? A.22,000 B.8,000 C.28,000 D.40,000
Pharoah Manufacturing Co. is evaluating two projects. The company uses payback criteria of three years or less. Project A has a cost of $901,000, and project B's cost is $1,268,100. Cash flows from both projects are given in the following table. Year Project A $86,212 1 2 3 4 313,562 427,594 285,552 Project B $586,212 413,277 231,199 What are their discounted payback periods? (Round answers to 2 decimal places, e.g. 15.25. If discounted payback period exceeds life of the project, enter 0.00 for the answer.) Discounted payback period of project A Pharoah should choose Discounted payback period of project B Which will be accepted with a discount rate of 8 percent?
6
PLEASE PROVIDE EXCEL SOLTION Consider the following EOY cash flows for two mutually exclusive types of microscope for a geoscience lab (one must be chosen, assume that annual benefits of both types are similar). The MARR is 5% per year. Microscope A Microscope B Capital investment Annual expenses Useful life Market value at end of useful life $60,000 $85,000 $1,400 $1,500 18 years $12,000 12 years $0 a. Determine which alternative should be selected if the repeatability assumption applies. b. Determine which alternative should be selected if the analysis period is 18 years, the repeatability assumption does not apply, and a microscope can be leased (i.e. borrowed) for $10,000 per year after the useful life of either microscope is over.
The value of your investment is divided into $30,000 for the land and $120,000 for the office space. Assume the salvage value of your investment is $40,000 at the end of seventh year. Using CCA=1%, compute the undepreciated capital cost of the office space for year four. a) Between $114,000 and $117,000 b) Between $120,000 and $123,000 c) Between $95,000 and $98,000 O d) Between $110,000 and $113,000 e) None of the answers are correct f) Between $92,000 and $95,000

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