Homework Answers
| Time line | 0 | 1 | |
| Cost of new machine | -140000 | ||
| =Initial Investment outlay | -140000 | ||
| Sales | 90000 | ||
| Profits | Sales-variable cost | 55000 | |
| -Depreciation | Cost of equipment/no. of years | -14000 | |
| =Pretax cash flows | 41000 | ||
| -taxes | =(Pretax cash flows)*(1-tax) | 27060 | |
| +Depreciation | 14000 | ||
| =after tax operating cash flow | 41060 | ||
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Jefferson & Sons is evaluating a project that will increase annual sales by $90,000 and annual...
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Jefferson & Sons is evaluating a project that will increase annual sales by $450,000 and annual costs by $270,000. The project will initially require $130,000 in fixed assets that will be depreciated straight-line to a zero book value over the 5 year life of the project. The applicable tax rate is 40 percent. The annual operating cash flow for this project is $___. Round it to a whole dollar.
Jefferson & Sons is evaluating a project that will increase annual sales by $70,000 and annual...
Jefferson & Sons is evaluating a project that will increase annual sales by $70,000 and annual costs by $40,000. The project will initially require an investment in machine, and the depreciation expense for this machine is $10,000. The applicable tax rate is 34 percent. What is the operating cash flow for this project?
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Tyngsborough Company is evaluating a project that will increase sales by $367,000 and costs by $179,000....
Tyngsborough Company is evaluating a project that will increase sales by $367,000 and costs by $179,000. The project will initially cost $1,326,000 for fixed assets that will be depreciated straight-line to a zero book value over the 10-year life of the project. The applicable tax rate is 25 percent. What is the operating cash flow for this project? $188,850 $181,250 $174,150 $168,750 $159,500
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5) Consider Project X which leads to an increase in annual sales by $50,000 and costs...
5) Consider Project X which leads to an increase in annual sales by $50,000 and costs by $30000. The initial asset cost amounts to $150,000 which will be depreciated straight line to zero book value during the 10-year life of the project. The tax rate is 25 percent. Find the annual operating cash flow for this project? Marks
al text of ng the tax swed approach book Was d. Mankind Traders is considering a...
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A proposed expansion project is expected to increase sales by $74,300 and increase cash expenses by...
A proposed expansion project is expected to increase sales by $74,300 and increase cash expenses by $46,900. The project will require $52,800 of fixed assets that will be depreciated using straight-line depreciation to a zero book value over the five-year life of the project. The store has a marginal tax rate of 23 percent. What is the operating cash flow of the project using the tax shield approach? Ignore bonus depreciation. $22,800.10 $11,114.40 $17,916.60 $23,526.80 $14,098.20
King Nothing is evaluating a new 6-year project that will have annual sales of $390,000 and...
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The Lumber Yard is considering adding a new product line that is expected to increase annual...
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5) Consider Project X which leads to an increase in annual sales by $50,000 and costs by $30000. The initial asset cost amounts to $150,000 which will be depreciated straight line to zero book value during the 10-year life of the project. The tax rate is 25 percent. Find the annual operating cash flow for this project? Marks
al text of ng the tax swed approach book Was d. Mankind Traders is considering a project that will produce sales of RM28) increase cash expenses by RM17,500 11 the project is implemented, taxes will increase by RM3,000. The additional depreciation expense will be RM60. An initial cash outlay of RM1,400 is required for networking capital. Find the amount of the operating cash flow using the top-down approach. 3 marks) Aish Berhas is evaluating a project that will increase annual...
King Nothing is evaluating a new 6-year project that will have annual sales of $390,000 and costs of $272,000. The project will require fixed assets of $490,000, which will be depreciated on a 5-year MACRS schedule. The annual depreciation percentages are 20.00 percent, 32.00 percent, 19.20 percent, 11.52 percent, 11.52 percent, and 5.76 percent, respectively. The company has a tax rate of 34 percent. What is the operating cash flow for Year 3? points Multiple Choice eBook • $109,867 Ask...
The Lumber Yard is considering adding a new product line that is expected to increase annual sales by $292,000 and expenses by $196,000. The project will require $105,000 in fixed assets that will be depreciated using the straight-line method to a zero book value over the 9-year life of the project. The company has a marginal tax rate of 34 percent. What is the depreciation tax shield? Multiple Choice $11,107 $11,031 $3,967 $32,640 $11,550
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