HomeworkLib
Question

You work for Whittenerg Inc., which is considering project whose data are shown below. What is the projects Year 1 cash flow

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Answer is $30,100

Sales Revenue = $67,000
Other Operating Costs = $25,000
Depreciation = $8,000
Tax Rate = 35.0%

EBIT = Sales Revenue - Other Operating Costs - Depreciation
EBIT = $67,000 - $25,000 - $8,000
EBIT = $34,000

Cash Flow = EBIT * (1 - Tax Rate) + Depreciation
Cash Flow = $34,000 * (1 - 0.35) + $8,000
Cash Flow = $22,100 + $8,000
Cash Flow = $30,100

0 0
Add a comment
Know the answer?
Add Answer to:
You work for Whittenerg Inc., which is considering project whose data are shown below. What is...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • You work for Whitteberg Inc., which is considering a new project whose data is shown below....

    You work for Whitteberg Inc., which is considering a new project whose data is shown below. What is the project’s Year 1 cash flow? Sales revenues, each year                                  $62,500 Depreciation                                                     $ 12,000 Other operating costs                                        $25,000 Interest expense                                               $  8,000 Tax rate                                                                35.0%

  • Cash Flow Problem • Your company, RMU Inc., is considering a new project whose data are...

    Cash Flow Problem • Your company, RMU Inc., is considering a new project whose data are shown below. What is the project's Year 1 cash flow? Sales revenues $20,000 $7,000 $10,000 Depreciation Other operating costs 35.0% Tax rate

  • Your company, CSUS Inc., is considering a new project whose data are shown below. The required...

    Your company, CSUS Inc., is considering a new project whose data are shown below. The required equipment has a 3-year tax life, and the accelerated rates for such property are 33%, 45%, 15%, and 7% for Years 1 through 4. Revenues and other operating costs are expected to be constant over the project's 10-year expected operating life. What is the project's Year 4 cash flow? Equipment cost (depreciable basis) $70,000 Sales revenues, each year $33,500 Operating costs (excl. depr.) $25,000...

  • Fool Proof Software is considering a new project whose data are shown below. The equipment that...

    Fool Proof Software is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life, and the allowed depreciation rates for such property are 33%, 45%, 15%, and 7% for Years 1 through 4. Revenues and other operating costs are expected to be constant over the project's 10-year expected life. What is the Year 1 cash flow? Equipment cost (depreciable basis) $48,000 Sales revenues, each year $60,000 Operating costs (excl. depr.)...

  • Fool Proof Software is considering a new project whose data are shown below. The equipment that...

    Fool Proof Software is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life, and the allowed depreciation rates for such property are 33%, 45%, 15%, and 7% for Years 1 through 4. Revenues and other operating costs are expected to be constant over the project's 10-year expected life. What is the Year 1 cash flow? Equipment cost (depreciable basis) $65,000 Sales revenues, each year              $60,000 Operating costs (excl. deprec.)...

  • 34. Borin Incorporated is considering a new project whose data are shown below. The required equipment...

    34. Borin Incorporated is considering a new project whose data are shown below. The required equipment has a 3-year tax life, and the accelerated rates for such property are 33%, 45%, 15%, and 7% for Years 1 through 4. Revenues and other operating costs are expected to be constant over the project's 10-year expected operating life. What is the project's Year 4 cash flow? $70,000 $33,500 $25,000 35.0% Equipment cost (depreciable basis) Sales revenues, each year Operating costs (excl. depr.)...

  • Whitestone Products is considering a new project whose data are shown below. The required equipment has...

    Whitestone Products is considering a new project whose data are shown below. The required equipment has a 3-year tax life, and the accelerated rates for such property are 33.33%, 44.45%, 14.81%, and 7.41% for Years 1 through 4. Revenues and other operating costs are expected to be constant over the project's 10-year expected operating life. What is the project's Year 4 cash flow? Equipment cost (depreciable basis) $70,000 Sales revenues, each year $42,500 Operating costs (excl. deprec.) $25,000 Tax rate...

  • Clemson Software is considering a new project whose data are shown below. The required equipment has...

    Clemson Software is considering a new project whose data are shown below. The required equipment has a 3-year tax life, after which it will be worthless, and it will be depreciated by the straight-line method over 3 years. Revenues and other operating costs are expected to be constant over the project's 3-year life. What is the project's Year 1 cash flow? Do not round the intermediate calculations and round the final answer to the nearest whole number. Equipment cost (depreciable...

  • TexMex Food Company is considering a new salsa whose data are shown below. The equipment to...

    TexMex Food Company is considering a new salsa whose data are shown below. The equipment to be used would be depreciated by the straight-line method over its 3-year life and would have a zero salvage value, and no change in net operating working capital would be required. Revenues and other operating costs are expected to be constant over the project's 3-year life. However, this project would compete with other TexMex products and would reduce their pre-tax annual cash flows. What...

  • In your first job with TBL Inc. your task is to consider a new project whose...

    In your first job with TBL Inc. your task is to consider a new project whose data are shown below. What is the project's Year 1 cash flow? Sales revenues $22,250 Depreciation $8,000 Other operating costs $12,000 Tax rate 35.0% a. $8,903 b. $9,746 c. $10,039 d. $9,463 e. $9,179

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT