A proposed new project has projected sales of $195,000, costs of $92,000, and depreciation of $25,200. The tax rate is 25 percent. Calculate operating cash flow using the four different approaches. (Do not round intermediate calculations.)

A proposed new project has projected sales of $195,000, costs of $92,000, and depreciation of $25,200. The tax rate is 25 percent. Calculate operating cash flow using the four different approaches. (Do not round intermediate calculations.)

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter12: Capital Budgeting: Decision Criteria

Section: Chapter Questions

Problem 7P: Your division is considering two investment projects, each of which requires an up-front expenditure...

See similar textbooks

Similar questions

A proposed new project has projected sales of $222,000, costs of $96,500, and depreciation of $26,100. The tax rate is 24 percent. Calculate operating cash flow using the four different approaches. (Do not round intermediate calculations.) EBIT+Deprectiation-taxes Top-down Tax Shield Bottom-up
A proposed new project has projected sales of $174,000, costs of $88,500, and depreciation of $24,500. The tax rate is 23 percent. Calculate operating cash flow using the four different approaches. (Do not round intermediate calculations.) EBIT + Depreciation - Taxes Top-down Tax-shield Bottom-up Operating cash flow
A proposed new project has projected sales of $215,000, costs of $104,000, and depreciation of $25,300. The tax rate is 23 percent. Calculate operating cash flow using the four different approaches. (Do not round intermediate calculations.) Operating cash flow EBIT+Depreciation - Taxes Top-down Tax-shield Bottom-up
A proposed new project has projected sales of $175,000, costs of $93,000, and depreciation of $24,800. The tax rate is 23 percent. Calculate operating cash flow using the four different approaches (common financial calculation, top-down approach, tax-shield approach and bottom-up approach).
A company is considering three alternative investment projects with different net cash flows. The present value of net cash flows is calculated using Excel and the results follow. Potential Projects Present value of net cash flows (excluding initial investment) Initial investment Project A $ 8,328 (10,000) Project B $ 10,809 (10,000) Project C $ 10,685 (10,000) a. Compute the net present value of each project. b. If the company accepts all positive net present value projects, which of these will it accept? c. If the company can choose only one project, which will it choose on the basis of net present value? Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute the net present value of each project. Potential Projects Project A Project B Project C Present value of net cash flows Initial investment Net present value
You have calculated the pro forma net income for a new project to be $46,260. The incremental taxes are $23,030 and incremental depreciation is $17,090. What is the operating cash flow?
Duo Corporation is evaluating a project with the following cash flows: Year Cash Flow 0 -$ 29,100 1 11,300 2 14,000 3 15,900 4 13,000 5 -9,500 The company uses a discount rate of 12 percent and a reinvestment rate of 7 percent on all of Its projects. Calculate the MIRR of the project using the discounting approach. (Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) MIRR % Calculate the MIRR of the project using the reinvestment approach. (Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 3216.) MIRR PA Calculate the MIRR of the project using the combination approach. (Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal
Foster Corporation is considering three investment projects: S, T, and U. Project S would require an investment of $20,000, Project T of $69,000, and Project U of $83,000. No other cash outflows would be involved. The present value of the cash inflows would be $23,200 for Project S, $77,970 for Project T, and $94,620 for Project U. Rank the projects according to the profitability index, from most profitable to least profitable. (Ignore income taxes.) OU, T, S OT,S, U OU, S, T O SU,T
Doak Corp. is evaluating a project with the following cash flows: Year Cash Flow 0 -$32,600 1 11,520 2 14,670 3 11,270 4 10,940 5 -4,230 The company uses an interest rate of 10 percent on all of its projects. Calculate the MIRR of the project using all three methods. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Discounting approach % Reinvestment approach % Combination approach %
Duo Corporation is evaluating a project with the following cash flows: Year 0 Cash Flow -$ 16,600 1 7,700 2 8,900 3 4 5 8,500 7,300 -4,700 The company uses an interest rate of 11 percent on all of its projects. Calculate the MIRR of the project using all three methods. Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. Discounting approach Reinvestment approach % % Combination approach %
a project will increase sales by $92,800 and cash expenses by $53,200. The project will cost $89,000 and be depreciated using straight-line depreciation to a book value of zero over the 4-year life of the project. The tax rate is 35 percent. what is the operating cash flow (OCF) of the project using the tax shield approach? A) $35,170.50 B)$28,650.00 C)$42,350.50 D)$37,672.50 E)$33,527.50
Solo Corp. is evaluating a project with the following cash flows: Year Cash Flow 0 29,500 1 11,700 2 14,400 3 16,300 4 13,400 5 9,900 The company uses a discount rate of 13 percent and a reinvestment rate of 6 percent on all of its projects. a. Calculate the MIRR of the project using the discounting approach. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b.Calculate the MIRR of the project using the reinvestment approach. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. Calculate the MIRR of the project using the combination approach. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Discounting approach MIRR b. Reinvestment approach MIRR C. Combination approach MIRR % % %