Determine Cash Flows Marigold Inc. is planning to invest in new manut 9,200 units at $54 each. The new manufacturin expenses related to the new product are expect < Direct labor Direct materials Fixed factory overhead-depreciation Variable factory overhead Total $9.20 30.00 Initial investment Operating cash flows: Annual revenues Selling expenses Cost to manufacture 2.10 4.60 $45.90 Determine the net cash flows for the first year round your intermediate calculations but, Marigold Inc. Net Cash Flows Year 1

Determine Cash Flows Marigold Inc. is planning to invest in new manut 9,200 units at $54 each. The new manufacturin expenses related to the new product are expect < Direct labor Direct materials Fixed factory overhead-depreciation Variable factory overhead Total $9.20 30.00 Initial investment Operating cash flows: Annual revenues Selling expenses Cost to manufacture 2.10 4.60 $45.90 Determine the net cash flows for the first year round your intermediate calculations but, Marigold Inc. Net Cash Flows Year 1

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Cash flows estimation and capital budgeting:You are the head of finance department in XYZ Company. You are considering adding a new machine to your production facility. The new machine’s base price is $11,000.00, and it would cost another $2,570.00 to install it. The machine falls into the MACRS 3-year class (the applicable MACRS depreciation rates are 33.33%, 44.45%, 14.81%, and 7.41%), and it would be sold after three years for $1,850.00. The machine would require an increase in net working capital (inventory) of $860.00. The new machine would not change revenues, but it is expected to save the firm $26,235.00 per year in before-tax operating costs, mainly labor. XYZ's marginal tax rate is 36.00%.If the project's cost of capital is 13.25%, what is the NPV of the project?Round your answer to two decimal places. For example, if your answer is $345.667 round as 345.67 and if your answer is .05718 or 5.718% round as 5.72.
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