Calculating project OCF, Corporate Finance

Assignment Help:
Nipissing, Inc,, is considering a new three year expansion project that requires an initial fixed asset investment of $2.4 million. The fixed asset falls in CCA Class 8 with a a 20 percent rate for tax purposes. When the project is completed, the fixed asset will be worthless, and Nipssing will have other assets remaining in that CCA class. The project is estiated to generate $2,550,000 in annual sales , with costs of $1,180,000. If the tax rate is 35 percent, what is the OCF for each year of this project?

Related Discussions:- Calculating project OCF

IRR, A firm issues bonds with a coupon rate of 10%, paid annually, having a...

A firm issues bonds with a coupon rate of 10%, paid annually, having a par value of 1000, YTM of 8% and maturity of 10 years. What is the IRR of buying the bond today and selling

Dividend policy, the managing directors of three profitable listed companie...

the managing directors of three profitable listed companies discussed their company''s dividend policies. company A has deliberately paid no dividends for the past five years. comp

Types of fixed income securities, Question: i) Compare and contr...

Question: i) Compare and contrast the various types of fixed income securities. ii) ‘A new issue of callable bonds will generally carry a higher interest rate

Find the total value - debt and assets ratio, Kodak Corporation has debt/as...

Kodak Corporation has debt/assets ratio of .3, its cost of debt is 9% and that of equity 13%. The tax rate of Kodak is 30%. The company is not growing, has a dividend payout ratio

What is an agent and the responsibilities of an agent, What is an agent? Wh...

What is an agent? What are the responsibilities of an agent? Ans: An agent is someone who has the implied or actual authority to act on behalf of another.  The owners whom the

Distinguish between natural hedging and cross-hedging, Question: (a) Is...

Question: (a) Is it feasible for a firm to hedge without using derivatives? (b) Distinguish between natural hedging, cross-hedging and direct hedging. (c) Mr Hedginglall

LEVERAGE, what will be impact on the operating leverage of a firm if it pr...

what will be impact on the operating leverage of a firm if it proceeds for additional borrowings

NPV Best Case/Worst Case, Ask que We are evaluating a project that costs $8...

Ask que We are evaluating a project that costs $800,000, has an eight-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the pr

Describe the mechanism of an interest rate swap, Question 1: Participan...

Question 1: Participants in a recent radio discussion on the WTO were full of ideas. The WTO could do this, the WTO should do that, they said. One of them finally interjected:

Difference between transaction and translation risk, Question: You have...

Question: You have been appointed as the treasurer of Dockers International, an automobile firm with many subsidiaries abroad. The management of Dockers International is relati

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd