Terminal cash flows at end of the projectjohnson corp is

Assignment Help Project Management

Reference no: EM13363191

Terminal cash flows at end of the project

Johnson Corp. is considering a huge project to expand.The project has an initial cost of $500,000 (this is amount can be depreciated using the following depreciation schedule: Year 1 is 33%, Year 2 is 45%, Year 3 is 15%, Year 4 is 7%. If the project moves forward, at t = 0 the company will need to increase its inventories by $50,000, and its accounts payable will rise by $10,000. This net operating working capital will be recovered at the end of the projects life (t = 4). If the project is moves forward, the company will realize an additional $600,000 in sales over each of the next four years (t = 1, 2, 3, 4). The companys operating cost (not including depreciation) will equal $400,000 a year. The companys tax rate is 40 percent. At t = 4, the projects economic life is complete, but it will have a salvage value of $50,000. The projects WACC = 10 percent. What is the one time cash flows/terminal cash flow associiated with ending the project?

a) 60,000
b) 40,000
c) 50,000
d) 90,000
e) 70,000

Reference no: EM13363191

Questions Cloud

Integrated project planmerchants for the first time in : integrated project planmerchants for the first time in history the festival can sell beer. limit 2 per person per day.

Risk management identifying risksrisk management is a : risk management identifying risksrisk management is a matter of identifying the situations that could cause your

Project managementassume that an activity has a normal tune : project managementassume that an activity has a normal tune of 20 weeks a normal cost of 72000 a crash time of 16 weeks

Project risks1 consider you are the project manager of a : project risks1. consider you are the project manager of a team of software specialists working on a project to produce

Terminal cash flows at end of the projectjohnson corp is : terminal cash flows at end of the projectjohnson corp. is considering a huge project to expand.the project has an

Scheduling the waitstaff for a 24-hour restaurantyou are in : scheduling the waitstaff for a 24-hour restaurantyou are in charge of scheduling the waitstaff for a 24-hour

Discuss about article obama administration criticizes : discuss about article obama administration criticizes jpmorgan over mortgagesthe article i chose this week obama

Brainstorming risk identificationplease help me explain the : brainstorming risk identificationplease help me explain the purpose and rationale of the risk identification process

1 if the organization within which the project is being : 1. if the organization within which the project is being undertaken has a risk department or section the project

User Account

All Pages