Depreciated straight-line to zero over three-year tax life
Course:- Financial Management
Reference No.:- EM13882244

Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
Assignment Help >> Financial Management

Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.97 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $2,170,000 in annual sales, with costs of $865,000. If the tax rate is 35 percent, what is the OCF for this project?

Put your comment

Ask Question & Get Answers from Experts
Browse some more (Financial Management) Materials
Nick’s Enchiladas Incorporated has preferred stock outstanding that pays a dividend of $5 at the end of each year. The preferred sells for $50 a share. What is the stock’s req
Builtrite is considering purchasing a new machine that would cost $60,000 and the machine would be depreciated (straight line) down to $0 over its five year life. What the RAT
The 7.3 percent weekly coupon bonds of the Socratic Educational Services Co. are selling for $951, have a face value of $1,000, and have a yield to maturity of 8.35 percent. A
USF Inc. has earnings of $2.35 per share. The benchmark price-earnings (PE) ratio for the company is 18. What stock price would you consider appropriate? The risk-free rate is
Answer the following questions relative the potential conflict in ranking mutually exclusive capital budgeting opportunities. Give two conditions under which IRR and NPV may p
Assume the loan has been outstanding for 2 years so there are 8 years to maturity. Payments on the loan are up to date and the fourth payment has just been made so the next pa
Corporation Y needs to purchase a new machine costing $2.08 million. Management is estimating the machine will generate cash inflows of $396,000 for two years and $300,000 for
What's the present value of a $930 annuity payment over five years if interest rates are 9 percent? (Do not round intermediate calculations and round your final answer to 2 de