QUESTION 25 A new project will generate $190,000 in new sales per year. The project costs $1,000,000 and will be depreciated using a 7-year MACRS schedule. The cash operating costs are $76,000. If the tax rate is 37%, what is the third year's ONOCFt? $419,287 $173,290 $154,199 $136,533 Onone of the above
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- 10 Project Omega is a 3-year project which requires an initial outlay of $8,000, which will be depreciated over the life of the project to a book value of zero using straight-line depreciation. It will generate incremental revenue of $8,000 per year and incur incremental costs (excluding depreciation) of $4,560. The tax rate is 25%. What is the annual incremental earnings after tax from this project? (a) $558 (b) $171 (c) $580 (d) $7517.2 Project Beta is a 6-year project which requires an initial outlay of $4,000. This outlay will be depreciated using straight-line depreciation over the life of the project. It will generate incremental revenue of $2000 per year and incremental costs (excluding depreciation) of $500. The tax rate is 30%. What is the project's annual tax payable? a. $50 b. $583 c. $250 d. $117 Clear my choice7.2 Project Beta is a 6-year project which requires an initial outlay of $4,000. This outlay will be depreciated using straight-line depreciation over the life of the project. It will generate incremental revenue of $2000 per year and incremental costs (excluding depreciation) of $500. The tax rate is 30%. What is the annual depreciation amount? a. $867 b. $667 c. $1533 d. $1333 Clear my choice
- es A 7-year project is expected to provide annual sales of $221,000 with costs of $97,500. The equipment necessary for the project will cost $360,000 and will be depreciated on a straight-line method over the life of the project. You feel that both sales and costs are accurate to +/-15 percent. The tax rate is 21 percent. What is the annual operating cash flow for the worst-case scenario? Multiple Choice $77,946 O $44,504 $70,623 $129,329 $49.221Help question 177
- Project Section 1: You are considering buying an industrial equipment whose price is 445000. The equipment is expected to earn an annual revenue of $150,000. The equipment will be depreciated under MACRS as a five-year recovery property. The equipment will be used for seven years, at the end of which time, you can sell it for $50,000. Your company's marginal tax rate is 35% over the project period. Perform the following: a) Determine the net after-tax cash flows for each period over the project life. b) Net present worth assuming company MARR 15% . c) Annual equivalent cash flow company MARR 15%. = =15 A project will increase sales by $92,800 and cash expenses by $53,200. The project will cost $89,000 and be depreciated using straight-line depreciation to a zero book value over the 4-year life of the project. The tax rate is 35 percent. What is the operating cash flow of the project using the tax shield approach?8
- 6 Project A requires a $375,000 initial investment for new machinery with a five-year life and a salvage value of $43,000. Project A is expected to yield annual income of $22,700 per year and net cash flow of $93,750 per year for the next five years. Compute Project A's accounting rate of return. 04:19:42 Numerator: Accounting Rate of Return Denominator: Accounting Rate of Return Accounting rate of returnIntro You are evaluating an investment project costing $49,000 initially. The project will provide $3,000 in after-tax cash flows in the first year, $4,000 in the second year and $7,000 each year thereafter for 10 years. The maximum payback period for your company is 9 years. Part 1 What is the payback period for this project? 0+ decimals Submit Part 2 Should your company accept this project? Yes No SubmitQuestion 2: SABIRCO wants to investigate the following project. Initial investment $1,000,000 Annual income $200,000 in year 1 and increase every year by 40,000. No salvage value MARR = 10% a) What is the discounted payback period? b) Assuming the project to be used for 8 years. What is the end balance of the project at end of year 8?