at the beginning of the project (year 0) and is reduced back to its original level in the final year. Find the internal rate of return for the project using the incremental cash flows. What is the annual operating cash flow of the project for year 2? (Round to the nearest dollar.)
at the beginning of the project (year 0) and is reduced back to its original level in the final year. Find the internal rate of return for the project using the incremental cash flows. What is the annual operating cash flow of the project for year 2? (Round to the nearest dollar.)
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
Related questions
Question
Project cash flow and
$3,900,000
and will be
he sales manager has an estimate for the sale of the classic Thunderbirds. The annual sales volume will be as follows:
|
Year one: 230
|
|
Year four: 370
|
|
|
Year two: 280
|
|
Year five: 330
|
|
|
Year three: 350
|
|
If the sales price is
$28,000
per car, variable costs are
$17,000
per car, and fixed costs are
$1,400,000
annually, what is the annual operating cash flow if the tax rate is
30%?
The equipment is sold for salvage for
$500,000
at the end of year five. Net working capital increases by
$500,000
at the beginning of the project (year 0) and is reduced back to its original level in the final year. Find the
What is the annual operating cash flow of the project for year 2?
(Round to the nearest dollar.)
MACRS Fixed Annual Expense Percentages by Recovery Class
|
Year
|
3-Year
|
5-Year
|
7-Year
|
10-Year
|
|
|
1
|
33.33%
|
20.00%
|
14.29%
|
10.00%
|
|
|
2
|
44.45%
|
32.00%
|
24.49%
|
18.00%
|
|
|
3
|
14.81%
|
19.20%
|
17.49%
|
14.40%
|
|
|
4
|
7.41%
|
11.52%
|
12.49%
|
11.52%
|
|
|
5
|
|
11.52%
|
8.93%
|
9.22%
|
|
|
6
|
|
5.76%
|
8.93%
|
7.37%
|
|
|
7
|
|
|
8.93%
|
6.55%
|
|
|
8
|
|
|
4.45%
|
6.55%
|
|
|
9
|
|
|
|
6.55%
|
|
|
10
|
|
|
|
6.55%
|
|
|
11
|
|
|
|
3.28%
|
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