An analyst has estimated the following financial projections for an investment. The corporate tax rate is 23 percent. Assume all sales revenue is received in cash, all operating costs and income taxes are paid in cash, and all cash flows occur at the end of the year. All net working capital is recovered at the end of the project. Investment Year O $27,000 Year 1 Year 2 Year 3 Year 4 Sales revenue $14,000 $14,500 $15,000 $12,000 Operating costs 3,000 3,100 3,200 2,400 Depreciation 6,750 6,750 6,750 6,750 Net working capital spending 330 380 430 330 ? a. Compute the incremental net income of the investment for each year. (Do not round intermediate calculations.) Year 1 Year 2 Year 3 Year 4 Net income b. Compute the incremental cash flows of the investment for each year. (Do not round intermediate calculations. A negative answer should be indicated by a minus sign.) Year 0 Year 1 Year 2 Year Cash flow Year 4

A project has the following cash in and out flows in its first year: Income generated:          R100 000 Cost of sales                       R30 000 Depreciation                       R10 000 What would the tax payable for the first year of the project be if the tax rate is 27%?

Answer each independent question, (a) through (e), below. a. Project A costs $5,000 and will generate annual after-tax net cash inflows of $1,800 for 5 years. What is the payback period for this investment under the assumption that the cash inflows occur evenly throughout the year? (Round your answer to 2 decimal places.) b. Project B costs $5,000 and will generate after-tax cash inflows of $500 in year 1; $1,200 in year 2; $2,000 in year 3; $2,500 in year 4; and $2,000 in year 5. What is the payback period (in years) for this investment assuming that the cash inflows occur evenly throughout the year? (Round your answer to 2 decimal places.) c. Project C costs $5,000 and will generate net cash inflows of $2,500 before taxes each year for 5 years. The firm uses straight-line depreciation with no salvage value and is subject to a 25% tax rate. What is the payback period under the assumption that all cash inflows occur evenly throughout the year? (Round your answer to 2 decimal places.)…

Answer each independent question, (a) through (e), below. a. Project A costs $5,000 and will generate annual after-tax net cash inflows of $1,800 for 5 years. What is the payback period for this investment under the assumption that the cash inflows occur evenly throughout the year? (Round your answer to 2 decimal places.) b. Project B costs $5,000 and will generate after-tax cash inflows of $500 in year 1; $1,200 in year 2; $2,000 in year 3; $2,500 in year 4; and $2,000 in year 5. What is the payback period (in years) for this investment assuming that the cash inflows occur evenly throughout the year? (Round your answer to 2 decimal places.) c. Project C costs $5,000 and will generate net cash inflows of $2,500 before taxes each year for 5 years. The firm uses straight-line depreciation with no salvage value and is subject to a 25% tax rate. What is the payback period under the assumption that all cash inflows occur evenly throughout the year? (Round your answer to 2 decimal places.)…

Answer each independent question, (a) through (e), below.   a. Project A costs $8,000 and will generate annual after-tax net cash inflows of $3,000 for 5 years. What is the payback period for this investment under the assumption that the cash inflows occur evenly throughout the year? (Round your answer to 2 decimal places.) b. Project B costs $8,000 and will generate after-tax cash inflows of $700 in year 1, $2,200 in year 2, $3,900 in year 3, $3,200 in year 4, and $3,900 in year 5. What is the payback period (in years) for this investment assuming that the cash inflows occur evenly throughout the year? (Round your answer to 2 decimal places.) c. Project C costs $8,000 and will generate net cash inflows of $3,250 before taxes for 5 years. The firm uses straight-line depreciation with no salvage value and is subject to a 30% tax rate. What is the payback period under the assumption that all cash inflows occur evenly throughout the year? (Round your answer to 2 decimal places.) d.…

The Fleming Manufacturing Company is considering a new investment. Financial projections for the investment are tabulated below. The corporate tax rate is 23 percent. Assume all sales revenue is received in cash, all operating costs and income taxes are paid in cash, and all cash flows occur at the end of the year. All net working capital is recovered at the end of the project.      Year 0 Year 1   Year 2   Year 3   Year 4     Investment $ 27,000                     Sales revenue     $ 14,000   $  14,500   $ 15,000   $ 12,000     Operating costs       3,000     3,100     3,200     2,400     Depreciation       6,750     6,750     6,750     6,750     Net working capital spending   330     380     430     330     ?     a. Compute the incremental net income of the investment for each year. (Do not round intermediate calculations.)

The Fleming Manufacturing Company is considering a new investment. Financial projections for the investment are tabulated below. The corporate tax rate is 22 percent. Assume all sales revenue is received in cash, all operating costs and income taxes are paid in cash, and all cash flows occur at the end of the year. All net working capital is recovered at the end of the project.        Year 0 Year 1   Year 2   Year 3   Year 4     Investment $ 41,000                     Sales revenue     $ 21,000   $  21,500   $ 22,000   $ 19,000     Operating costs       4,400     4,500     4,600     3,800     Depreciation       10,250     10,250     10,250     10,250     Net working capital spending   470     520     570     470     ?   a. Compute the incremental net income of the investment for each year. Year 1, Year 2, Year 3, Year 4 b. Compute the incremental cash flows of the investments for each year. Year 1, Year 2, Year 3, Year 4 c. Suppose the appropriate discount rate…

b. Project B costs $5,000 and will generate after-tax cash inflows of $500 in year 1; $1,200 in year 2; $2,000 in year 3; $2,500 in year 4; and $2,000 in year 5. What is the payback period (in years) for this investment assuming that the cash inflows occur evenly throughout the year? (Round your answer to 2 decimal places.) c. Project C costs $5,000 and will generate net cash inflows of $2,500 before taxes each year for 5 years. The firm uses straight-line depreciation with no salvage value and is subject to a 25% tax rate. What is the payback period under the assumption that all cash inflows occur evenly throughout the year? (Round your answer to 2 decimal places.) d. Project D costs $5,000 and will generate sales of $4,000 each year for 5 years. The cash expenditures will be $1,500 per year. The firm uses straight-line depreciation with an estimated salvage value of $500 and has a tax rate of 25%. (1) What is the accounting (book) rate of return based on the original investment?…

2. Calculating Project NPV The Fleming Company is considering a new investment. Financial projections for the investment are tabulated below. The corporate tax rate is 22 percent. Assume all sales revenue is received in cash, all operating costs and income taxes are paid in cash, and all cash flows occur at the end of the year. All net working capital is recovered at the end of the project. Investment Sales revenue Operating costs Depreciation Net working capital spending Year 0 $32,800 450 Year 1 Year 2 Year 3 Year 4 $14,200 2,100 8,200 175 $15,900 $15,700 2,100 2,100 8,200 8,200 250 275 $12,900 2,100 8,200 ? a. Compute the incremental net income of the investment for each year. b. Compute the incremental cash flows of the investment for each year. c. Suppose the appropriate discount rate is 12 percent. What is the NPV of the project?

The company will invest $150,000 in a project and average annual income     $50,000. The investment will provide the following inflows:                           Year Cash inflow 1 $ 25,000 2    45,000 3    30,000 4    50,000 5    70,000                                   Calculate: Net present value at 15% discount factor. Payback period Accounting rate of return     Note: 15% discount factor : Year 15% discount factor 1 0.8696 2 0.7561 3 0.6575 4 0.5718 5 0.4972