The firm founder purchases a construction crane to rent out. Only equity capital is used, no debt. The terms of the rental are such that the services of a crane operator are included in the lease of the equipment, in a manner similar to the Taxi analysis, wherein the taxi provides the vehicle, and driver. The firm is contemplating the following: Crane acquisition cost $ 1,000,000 Years of useful life (economic life) 5 Tax rate 0% Required rate of return on equity 10% Annual revenues $ 2,000,000 Operating expenses include only: “Other expenses” of $1,500,000, plus depreciation. what's the operating cash flow analysis? What's the economic profit analysis?
The firm founder purchases a construction crane to rent out. Only equity capital is used, no debt. The terms of the rental are such that the services of a crane operator are included in the lease of the equipment, in a manner similar to the Taxi analysis, wherein the taxi provides the vehicle, and driver.
The firm is contemplating the following:
Crane acquisition cost $ 1,000,000
Years of useful life (economic life) 5
Tax rate 0%
Required
Annual revenues $ 2,000,000
Operating expenses include only: “Other expenses” of $1,500,000, plus
what's the operating
What's the economic profit analysis?
Cash flow statement determines the total cash inflows and outflows occurred to a business during a financial year. Three major sections of a cash flow statement are operating activities, financing activities and investing activities.
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