What is the operating cash flow for year four

Assignment Help Financial Management
Reference no: EM131054664

ABC Company has a proposed project that will generate sales of 284 units annually at a selling price of $298 each. The fixed costs are $6,914 and the variable costs per unit are $117. The project requires $24,187 of equipment that will be depreciated on a straight-line basis to a zero book value over the 4-year life of the project. That is, depreciation each year is $24,187/4. The salvage value of the fixed assets is $6,900 and the tax rate is 26 percent. What is the operating cash flow for year four?

Reference no: EM131054664

Questions Cloud

The price-earnings ratio and the price-book value ratio : Look up a publicly traded company of your choice (look under the investor section of their website or go to free Edgar online to get information) and calculate: a. The price/earnings ratio b. The price/book value ratio c. The price/revenue ratio Note..
What are the operating cash flows : ABC Inc. has estimated the following revenues and expenses related phase I of a proposed new housing development? Incremental sales= $6,335,814, total cash expenses $3,212,642, depreciation $388,125, taxes 29%, interest expense, $200,000. What are th..
What is value of the stock if the appropriate discount rate : Doctors-On-Call, a newly formed medical group, just paid a dividend of $.50. The company's dividend is expected to grow at a 20% rate for the next 5 years and at a 3% rate thereafter. What is the value of the stock if the appropriate discount rate is..
What is the operating cash flow for year four : ABC Company has a proposed project that will generate sales of 284 units annually at a selling price of $298 each. The fixed costs are $6,914 and the variable costs per unit are $117. The project requires $24,187 of equipment that will be depreciated..
Fixed assets will be depreciated to zero book value : A project has an initial requirement of $229,025 for new equipment and $9,004 for net working capital. The fixed assets will be depreciated to a zero book value over the 3-year life of the project and have an estimated salvage value of $82,095. All o..
Equipment that is classified as seven-year property : A project requires $353,268 of equipment that is classified as 7-year property. What is the book value of this asset at the end of year 3 given the following MACRS depreciation allowances, starting with year one: 14.29, 24.49, 17.49, 12.49, 8.93, 8.9..
The market return on similar bonds : BioMax Inc. offers a 10 percent coupon bond that has a $1,000 par value, semiannual coupon payments and 20 years of its original 25 years left to maturity. Which of the following statements is true if the market return on similar bonds is 8.5%?
What if rates suddenly fall by two percent instead : Bond J has a coupon rate of 4 percent and Bond K has a coupon rate of 10 percent. Both bonds have 13 years to maturity, make semiannual payments, and have a YTM of 7 percent. If interest rates suddenly rise by 2 percent, what is the percentage price ..

Reviews

Write a Review

Financial Management Questions & Answers

  Historical cost information instead of market values

Why does the balance sheet report historical cost information instead of market values for assets? Please explain

  Uncertain how the market would set the yield to maturity

Blue Crab, Inc. plans to issue new bonds, but is uncertain how the market would set the yield to maturity. The bonds would be 26-year to maturity, carry a 11.54 percent annual coupon, and have a $1,000 par value. Blue Crab, Inc. has determined that t..

  Briefly describe two products-goods or services

Briefly describe two (2) products (goods or services) offered at a business you are familiar with. Next, identify two (2) major competitors and describe the two (2) products they offer that compete with yours.

  Uses the net present value method and has a discount rate

Dweller, Inc. is considering a four-year project that has an initial after-tax outlay or after-tax cost of $110,000. The future cash inflows from its project are $30,000, $25,000, $50,000 and $40,000 for years 1, 2, 3 and 4, respectively. Dweller use..

  The range of the distribution against the markets assumption

You want to compare your assumption about the range of the distribution against the market's assumption. You observed that the PUT at strike 100 is priced at $15. What is the range and MAD implied in the price of the PUT option?

  Bureaucratic agency may demonstrate its risk aversion

A bureaucratic agency may demonstrate its risk aversion by A. Avoiding taking on new operations. B. Creating several layers of oversight to guarantee no single person is responsible for any one decision. C. Changing rules frequently to keep anyone fr..

  What is balance of current liabilities on firm balance sheet

The assets of Dallas & Associates consist entirely of current assets and net plant and equipment. The firm has total assets of $2.4 million and net plant and equipment equals $2.1 million. It has notes payable of $150,000, long-term debt of $755,000,..

  The current price of a non-dividend-paying stock

The current price of a non-dividend-paying stock is $41. Over the next year it is expected to rise to $52 or fall to $31. Assume the risk free rate is zero.   An investor buys a put option with a strike price of $41.   How would the investor hedge th..

  Risk capital investment that offers superior rate of return

Fitz is risk-averse and is content with a relatively low but safe return on his investments. Frieda is risk-tolerant and seeks a very high rate of return on her invested savings. Yet both shareholders will applaud allow-risk capital investment that o..

  Effective annual interest rate on this lending arrangement

Come and Go Bank offers your firm a discount interest loan with an interest rate of 8 percent for up to $24 million, and in addition requires you to maintain a 1 percent compensating balance against the face amount borrowed. What is the effective ann..

  Level change as key component of the operating budget

Discuss the fringe benefit level change as a key component of the operating budget for any healthcare organization. Why is it so important? Your response must be at least 200 words in length.

  Compute the effect on mr monks agi

Compute the effect on Mr. Monk's AGI and taxable income of his painting revenue and expenses under each of the following assumptions: a. Mr. Monk earned $13,290 from sales of his paintings. This was the sixth consecutive year that the painting activi..

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