oosevelt Communication is trying to estimate the Year 1 operating cash flow for a proposed project. The assets required for the project were fully depreciated at the time of purchase. The financial staff has collected the following information: Sales revenues $13.3 million Operating Costs 8.4 million Interest Expense 1.3 million Roosevelt has also determined that this project would cannabalize one of its other projecrs by $1.6 million of cash flow (before taxes) per year. The firm has a 25 percent tax rate, and its WACC is 8 percent. Calculate the project's operating cash flow for Year 1. Answers: a. $ -25,000 b. $2,475,000 c. $1,500,000 d. $2,700,000 e. $3,675,000
Roosevelt Communication is trying to estimate the Year 1 operating cash flow for a proposed project. The assets required for the project were fully
Sales revenues $13.3 million
Operating Costs 8.4 million
Interest Expense 1.3 million
Roosevelt has also determined that this project would cannabalize one of its other projecrs by $1.6 million of cash flow (before taxes) per year. The firm has a 25 percent tax rate, and its WACC is 8 percent. Calculate the project's operating cash flow for Year 1.
Answers:
a. $ -25,000
b. $2,475,000
c. $1,500,000
d. $2,700,000
e. $3,675,000
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