Eisenhower Communications is trying to estimate cash flows for a proposed project. The following information has been collected on the project: Equipment cost $10,000 Working capital investment $2,000 Revenue $10,000 Operating Expense (excluding depreciation) $6,000 Interest expense $2,000 Tax Rate 40% Salvage value $4,000 Project lifespan 4 years Year Depreciation Rate 1 33% 2 45% 3 15% 4 7% The initial investment outlay or cash flow at the start of the project (time 0) is: Question 30 options: ($8,000) ($10,000) ($12,000) ($4,000)
Eisenhower Communications is trying to estimate cash flows for a proposed project. The following information has been collected on the project: Equipment cost $10,000 Working capital investment $2,000 Revenue $10,000 Operating Expense (excluding depreciation) $6,000 Interest expense $2,000 Tax Rate 40% Salvage value $4,000 Project lifespan 4 years Year Depreciation Rate 1 33% 2 45% 3 15% 4 7% The initial investment outlay or cash flow at the start of the project (time 0) is: Question 30 options: ($8,000) ($10,000) ($12,000) ($4,000)
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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30) Eisenhower Communications is trying to estimate cash flows for a proposed project. The following information has been collected on the project:
| Equipment cost | $10,000 |
| Working capital investment | $2,000 |
| Revenue | $10,000 |
| Operating Expense (excluding |
$6,000 |
| Interest expense | $2,000 |
| Tax Rate | 40% |
| Salvage value | $4,000 |
| Project lifespan | 4 years |
| Year | Depreciation Rate |
| 1 | 33% |
| 2 | 45% |
| 3 | 15% |
| 4 | 7% |
The initial investment outlay or cash flow at the start of the project (time 0) is:
Question 30 options:
|
|
($8,000) |
|
|
($10,000) |
|
|
($12,000) |
|
|
($4,000) |
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