Laurel’s Lawn Care Ltd., has a new mower line that can generate revenues of $129,000 per year. Direct production costs are $43,000, and the fixed costs of maintaining the lawn mower factory are $16,500 a year. The factory originally cost $0.86 million and is being depreciated for tax purposes over 20 years using straight-line depreciation. Calculate the operating cash flows of the project if the firm’s tax bracket is 25%. (Enter your answer in dollars not in millions.)
Laurel’s Lawn Care Ltd., has a new mower line that can generate revenues of $129,000 per year. Direct production costs are $43,000, and the fixed costs of maintaining the lawn mower factory are $16,500 a year. The factory originally cost $0.86 million and is being depreciated for tax purposes over 20 years using straight-line depreciation. Calculate the operating cash flows of the project if the firm’s tax bracket is 25%. (Enter your answer in dollars not in millions.)
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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Laurel’s Lawn Care Ltd., has a new mower line that can generate revenues of $129,000 per year. Direct production costs are $43,000, and the fixed costs of maintaining the lawn mower factory are $16,500 a year. The
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