Fundamentals of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
9th Edition
ISBN: 9781259722615
Author: Richard A Brealey, Stewart C Myers, Alan J. Marcus Professor
Publisher: McGraw-Hill Education
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Chapter 9, Problem 10QP
Summary Introduction
To compute: The operating cash flow of the company.
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Laurel’s Lawn Care Limited has a new mower line that can generate revenues of $132,000 per year. Direct production costs are $44,000, and the fixed costs of maintaining the lawn mower factory are $17,000 a year. The factory originally cost $1.10 million and is being depreciated for tax purposes over 25 years using straight-line depreciation. Calculate the operating cash flows of the project if the firm’s tax bracket is 25%.
Operating Cash Flow = _________
Laurel's Lawn Care Limited has a new mower
line that can generate revenues of $135,000
per year. Direct production costs are $45,000,
and the fixed costs of maintaining the lawn
mower factory are $17, 500 a year. The
factory originally cost $0.90 million and is
being depreciated for tax purposes over 20
years using straight-line depreciation.
Calculate the operating cash flows of the
project if the firm's tax bracket is 25% . Note:
Enter your answer in dollars not in millions.
Laurel's Lawn Care, Ltd., has a new mower line that can generate revenues of $135,000
per year. Direct production costs are $45,000, and the fixed costs of maintaining the
lawn mower factory are $17,500 a year. The factory originally cost $0.9 million and is
being depreciated for tax purposes over 20 years using straight-line depreciation.
Calculate the operating cash flows of the project if the firm's tax bracket is 30%. (Enter
your answer in dollars not in millions.)
Operating cash
flows
%24
Chapter 9 Solutions
Fundamentals of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
Ch. 9 - Prob. 1QPCh. 9 - Prob. 2QPCh. 9 - Prob. 3QPCh. 9 - Prob. 4QPCh. 9 - Prob. 5QPCh. 9 - Prob. 6QPCh. 9 - Prob. 7QPCh. 9 - Prob. 8QPCh. 9 - Prob. 10QPCh. 9 - Prob. 12QP
Ch. 9 - Prob. 13QPCh. 9 - Prob. 14QPCh. 9 - Prob. 15QPCh. 9 - Prob. 17QPCh. 9 - Prob. 20QPCh. 9 - Prob. 21QPCh. 9 - Prob. 22QPCh. 9 - Prob. 23QPCh. 9 - Prob. 24QPCh. 9 - Prob. 25QPCh. 9 - Prob. 26QPCh. 9 - Prob. 27QPCh. 9 - Prob. 28QPCh. 9 - Prob. 29QPCh. 9 - Prob. 30QPCh. 9 - Prob. 32QPCh. 9 - Prob. 34QP
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