Option (C).
Annual net benefit (NB) = Revenue - expense = 75,000 - 45,000 = 30,000
PBP is the time by when cumulative NAB is zero. So
PBP = First cost / NB = 130,000 / 30,000 = 4.33
A manufacturer has identified the cash flow shown for manufacturing and sales | -130,000 First cost,...
A public project has the following cash flow: The first cost is $357,524 and the annual M&O is $5,633, the estimated annual benefits are $37,238 and disbenefits of $12,462 per year, if the project period is 50 years and discount rate is 5% , the expected modified B/C ratio is
Operating cash flow. Huffman Systems has forecasted sales for its new home alarm systems to be 65,000 units per year at $40.00 per unit The cost to produce each unit is expected to be about 40 % of the sales price The new product will have an additional $490,000 of fixed costs each year, and the manufacturing equipment will have an initial cost of $3,000,000 and will be depreciated over eight years (straight line) The company tax rate is 35%....
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1: What is the operating cash flow for this project for the
first five years of the 10-year period??
2: for the last five years of the 10-year period?
3: What is the book value?
4: Calculate the gain or loss at disposal of the manufacturing
equipment.
5: What is the after-tax cash flow at disposal?
6: What is the net present value?
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