Bad Company has a new 4-year project that will have annual sales of 8,400 units. The price per unit is $19.90 and the variable cost per unit is $7.65. Theproject will require fixed assets of $94,000, which will be depreciated on a 3-year MACRS schedule. The annual depreciation percentages are 33.33percent, 44 45 percent, 14.81 percent, and 7.41 percent, respectively. Fixed costs are $34,000 per year and the tax rate is 21 percent. What is theoperating cash flow for Year 3?Mutiple Choice$56.650$57354$53,464$20359

Operating Cash flow is the amount which is earned by the investor from the project. It is the net…

Answered: Bad Company has a new 4-year project…

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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Marie's Fashions is considering a.9 project that will require $ 39,000 in net working capital and $ 68,000 in fixed assets. The project is expected to produce annual sales of $ 73, 000 with associated cash costs of $ 42,500. The project has a four- year life. The company uses straight line depreciation to a zero book value over the life of the project. Ignore bonus depreciation . The tax rate is 25 percent. What is the operating cash flow for this ? project
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Bad Company has a new 4-year project that will have annual sales of 8,400 units. The price per unit is $19.90 and the variable cost per unit is $7.65. The project will require fixed assets of $94,000, which will be depreciated on a 3-year MACRS schedule. The annual depreciation percentages are 33.33 percent, 44.45 percent, 14.81 percent, and 7.41 percent, respectively. Fixed costs are $34,000 per year and the tax rate is 25 percent. What is the operating cash flow for Year 3? $20,705 $80,655 $57,550 $55,155 $60,744
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