General Accounting Question solution with provide option A project has a contribution margin of $5, projected fixed costs of$12,000, a projected variable cost per unit of $12, and a projectedpresent value break-even point of 5,000 units.What is the operating cash flow at this level of output?A. $1,000.B. $12,000.C. $13,000.D. $68,000.E. $73,000.

Step 1: Formula Operating cash flow at break-even point = (Breakeven point in units x Contribution…

Answered: A project has a contribution margin of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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You are analyzing a project and have developed the following estimates. The depreciation is $47,900 a year and the tax rate is 21 percent. What is the worst-case operating cash flow? Unit sales Sales price per unit Variable cost per unit Fixed costs -$2,545 $11,145 $88,855 $27,556 O $63,937 Base-Case Lower Bound Upper Bound 9,800 12,800 $34 $24 $ 9,200 11,300 $ 39 $25 $ 9,700 $44 $26 $ 10,200
You are analyzing a project and have developed the following estimates: unit sales = 2,150, price per unit = $84, variable cost per unit = $57, fixed costs per year = $13,900. The depreciation is $8,300 a year and the tax rate is 35 percent. What effect would an increase of $1 in the selling price have on the operating cash flow?
A project has following estimated data: Price = $60 per unit; variable cost = $30 per unit; Fixed cost = $100,000; Company has borrowings of $100,000 at a rate of 10%. Calculate the combined leverage of the project when units sold are 10,000 units. а. 1.58 b. 0.63 с. 1.50 d. 1.05
= $ A project has the following estimated data: price 104.00 per unit; variable costs = $60.50 per unit; fixed costs investment = $39,600.00; life = 6 years. What is the $37,500.00; required return = 8%; initial degree of operating leverage at the financial break - even level of output? a) 4.38 b) 7.38 c) 6.38 d) 3.38 e ) 5.38
v) For projects A and B determine the Net present value (NPV) and the internal rate of return (IRR). The unit cost is (RO) 350 Description Capital (RO) Life (years) Capacity (units per year) Salaries per year (RO) Other fixed costs per year (RO) Project-A 355,000 Project-B 450,200 15 15 Wages per year (RO) Cost of materials per year (RO) Other variable costs per year (RO) Scrap value at the end of the year (RO) Cost of capital (%) 10,000 45,000 40,000 70,000 229,000 35,000 31,700 15 12,000 50,000 85,000 80,000 279,000 40,000 43,700 15
Problem 1.a Given the following cash flows for Project M: C0 = -1,000, C1 = +200, C2 = +700, C3 = +698 calculate the IRR for the project. Problem 1.b Project X has the following cash flows: C0 = +2,000, C1 = -1,150, and C2 = -1,150. If the IRR of the project is 9.85% and if the cost of capital is 12%, would you accept or reject? Problem 1.c Story Company is investing in a giant crane. It is expected to cost $6.0 million in initial investment, and it is expected to generate an end-of-year after-tax cash flow of $3.0 million each year for three years. Calculate the NPV at 12%. Would you suggest company to invest? Problem 1.d The real interest rate is 3.0% and the inflation rate is 5.0%. What is the nominal interest rate? Problem 1.e Your firm expects to receive a cash flow in two years of $10,816 in nominal terms. If the real rate of interest is 2% and the inflation rate is 4%, what is the real cash flow for year 2?
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You are analyzing a project and have developed the following estimates. The depreciation is $7,600 a year and the tax rate is 34 percent. What is the worst-case operating cash flow? Unit sales Sales price Variable cost Fixed costs TTT Base Case 3.100 $19 $12 $8.200 Lower Bound 2,500 $16 $10 $7.800 Upper Bound 3,400 $22 $14 $8.500 per unit O 1) -$1,311 O 2) -$641 3) $274 4) $1,206
Suppose a project has the following cash flows. What is the NPV if the cost of the project is $105,000 and the required return is 9.75%? Year Cash Flow $28.000 32,000 3 36,000 4 39,000 O$6,000 O $20,678 $1,193 $27,335 O $30,000 Page 16 of 30

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A project has a contribution margin of $5, projected fixed costs of $12,000, a projected variable cost per unit of $12, and a projected present value break-even point of 5,000 units. What is the operating cash flow at this level of output? A. $1,000. B. $12,000. C. $13,000. D. $68,000. E. $73,000.