Hello tutor please provide this question solution general accounting Tech Corp evaluates a project with $40,000 increased sales.Project costs $200,000, depreciated straight-line over 8 years.Tax rate 30%. What's the OCF?A. $12,000B. $35,500C. $28,000D. $40,000

Step 1: Definition of Operating Cash Flow (OCF)Operating Cash Flow (OCF) represents the cash…

Answered: Tech Corp evaluates a project with…

EBK CFIN

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ISBN:9781337671743

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Chapter9: Capital Budgeting Techniques

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You work for Whittenerg Inc., which is considering a new project whose data are shown below. What is the project's Year 1 cash flow? Sales revenues, each year $64,500 Depreciation $8,000 Other operating costs $25,000 Interest expense $8,000 Tax rate 35.0% a. $20,017 b. $20,715 c. $22,577 d. $19,318 e. $23,275
A project costs $800,000 plus $200,000 in shipping and installation. For the next five years the project is expected to la generate $500,000 in sales & 200,00 in costs. The project is being depreciated straight line over five years ($200,000 per year). The firm's tax rate is 40% and K = 10%. Find the NPV. Should the project be undertaken? pries
1.A project of GHS2,000,000 yielded annually a profit of GHS400,000 after depreciation at 10% and subject to income tax at 40%. Calculate payback period of this project 2.A project is expected to cost $10,000,000. The expected annual income before depreciation and tax is $2,000,000. Provision for depreciation at 10%. Income tax at 25%. Calculate the payback period of this project.
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A firm is looking at an expansion project will entail an equipment purchase of $110,000 along with another $10,000 in installation costs. MACRS 3 year. Increased net sales (net of expenses except for depreciation or EBITDA) are 40,000 year 1, 70,000 year 2 and 30,000 year 3. The equipment can be sold at the end of the 3 years for $20,000. Tax 30%. WACC 8% 1.What is the initial investment (CFO)? 2.What are the year 1-3 OCFs (operating cash flows)? 3.What is the terminal value? 4.What is the NPV (net present value)? 5.What is the IRR (internal rate of return)? 6.What is the payback? What is the discounted payback?
Ernie's Electrical is evaluating a project that will increase sales by $48,000 and costs by $16,000. The project will initially cost $89,000 for fixed assets that will be depreciated straight-line to a zero book value over the 6-year life of the project. The applicable tax rate is 34 percent. What is the project’s annual operating cash flow? Group of answer choices $23,300.13 $21,450.87 $26,163.33 $22,406.67 $18,180.09
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Tech Corp evaluates a project with $40,000 increased sales. Project costs $200,000, depreciated straight-line over 8 years. Tax rate 30%. What's the OCF? A. $12,000 B. $35,500 C. $28,000 D. $40,000