What is project incremental after-tax free cash flow

Assignment Help Financial Management

Reference no: EM131913960

Amsted, Inc. is considering a project that will increase revenues by $2.5 million, cash operating expenses by $700,000, and depreciation and amortization by $300,000 during 2011. For this project, the firm will purchase $800,000 of equipment during the year while decreasing its inventory by $200,000 (with no corresponding decrease in current liabilities. The marginal tax rate for Amsted is 35 percent. What is this project’s incremental after-tax free cash flow for 2011?

Reference no: EM131913960

Questions Cloud

Determining the marginal product of labor : How does AT&T's production function related to its marginal product of labor? How is AT&T's marginal product of labor related to the value of its marginal?

Determine amount of gross profit or loss to be recognized : Determine the amount of gross profit or loss to be recognized in each of the three years using the percentage-of-completion method

Initial cost and provides cash inflows : Project A has an initial cost of $80,000 and provides cash inflows of $34,000 a year for three years.

Quantity of labor to demand : Explan how AT&T determines what quantity of labor to demand and what events could shift the demand and supply of that labor.

What is project incremental after-tax free cash flow : The marginal tax rate for Amsted is 35 percent. What is this project’s incremental after-tax free cash flow for 2011?

Discuss the qualitative research techniques : Starbucks is on a constant quest to learn more about Starbucks consumers. As such, exploratory research is a key tool to better understand their current.

Determining the japanese inflation rate : Suppose that on January 1, the price of one hundred yen was 80?(80 cents) and PPP held. Over the year, the Japanese inflation rate was 5 percent

Strategic financial planning in long-term care : Review the Case Study: Strategic Financial Planning in Long-Term Care,

How advancement in engine technology would change : Explain using graphs and words, how an increase in fuel price changes an airline's TC, VC, FC, ATC, AVC, AFC and MC?

User Account

All Pages