PLEASE HELP!!!! THANK YOU!!! (Related to Checkpoint 12.1) (Calculating changes in net operating working capital) Tetious Dimensions is introducing anew product and has an expected change in net operating income of $780,000. Tetious Dimensions has a 30 percent marginaltax rate. This project will also produce $205,000 of depreciation per year. In addition, this project will cause the followingchanges in year 1:Without the Project$58,000103,00075,000With the Project$93,000181,000115,000Accounts receivableInventoryAccounts payable(Click on the icon in order to copy its contents into a spreadsheet.)What is the project's free cash flow in year 1?

Free cash flow is the free money that a business or organization has available, This money is used…

Answered: (Related to Checkpoint 12.1)…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 5P

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ANB has a project with $185211 in depreciation expense each year, no changes in net working capital each year, and initial capital expenditures of $461696. The project is expected to last for two years. If the discount rate is 0.080, what constant level of unlevered net income results in a NPV of 0 for this project?
A project has annual NPV break-even level of sales of $3,000,000. The annual net cash flows can be calculated as (0.16 x sales- $392,000). The project has a 5-year life and the company's cost of capital is 8.70%. Ignoring the impact of depreciation and taxes, what is the most that should be invested in this project today? a. $229,980 b. $1,320,000 C. $440,000 d. $344,970 e. $880,000
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Suppose you are considering an investment project that requires $800.000, has a six-year life, and has a salvage value of $100,000. Sales volume is projected 10 be 65,000 units per year. Price per un it is $63, variable cos! per unit is $42, and fixed costs are $532,000 per year. The depreciation method is a five-year MACRS. 1l1e tax rate is 35% and you ex pect a 20% relurn on this investment. a-Determine the break-even sales volume. b-Calculate the cash flows of the base case over six years and its NPW. c-lf the sales price per unit increases to $400, what is the required break-even volume? d-Suppose the projections given for price, sales volume, variable costs, and fixed costs are all accurate to within ± 15%. What would be the NPW figures of the best-case and worst-case scenarios?
An investment has an initial cost of $3.2 million. This investment will be depreciated by $900,000 a year over the 3-year life of the project. Should this project be accepted based on the average accounting rate of return if the required rate is 10.5 percent? Why or why not? Net Income $211.700 186.400 Year 165,500 O Yes; because the AAR is 10.5 percent O Yes; because the AAR is less than 10.5 percent O Yes; because the AAR is greater than 10.5 percent O No; because the AAR is greater than 10.5 percent O No; because the AAR is less than 10.5 percent
A proposed project is expected to generate returns of $50,000 per year for each of the next four years. If the project will cost $145,685 and taxes are ignored, what is the internal rate of the return (IRR) for the proposed project?. O 12% O 16% O 14% O Less than 10% Hi in
Suppose you are considering an investment project that requires $800.000, has a six-year life and has a salvage value of $100,000. Sales volume is projected 10 be 65,000 units per year. Price per unit is $63, variable cos! per unit is $42, and fixed costs are $532,000 per year. The depreciation method is a five-year MACRS. 1l1e tax rate is 35% and you expect a 20% return on this investment.(a) Determine The break-even sales volume.(b) Calculate the cash flows o( the base case over six years and its NPW.(c) lf the sales price per unit increases to $400, what is the required break-even volume?(d) Suppose the projections are given for price, sales volume, variable costs, and fixed costs are all accurate to within ± 15%. What would be the NPW Figures of the best-case and worst-case scenarios?

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