What is the operating net cash flow in year one

Assignment Help Financial Management
Reference no: EM131333853

The president of Real Time Ltd has asked you to evaluate the proposed acquisition of a new computer system. The system's price is $39,000, and will be depreciated straight-line over a three year life. Purchase of the system would require an increase in net operating working capital of $2,000. The system would increase the firm's before-tax revenues by $20,000 per year but would also increase operating costs by $5,000 per year. The system is expected to be used for 3 years and then be sold for $25,000. The firm's marginal tax rate is 30%. 15. Please refer to Exhibit 1. What is the operating net cash flow in Year 1? A. $ 9,000 B. $10,240 C. $11,687 D. $13,453 E. $14,400 16. Please refer to Exhibit 1. What is the terminal cash flow? A. $17,500 B. $19,500 C. $21,000 D. $25,000 E. $27,000

Reference no: EM131333853

Questions Cloud

Disposal for conservation biology product : Imagine that you had 1/1000 of the worlds gross domestic product available at your disposal for conservation biology product? Is it a sound conservation decision to protect just 4% of the earth's living habitat? Why or why not? What other decision..
Find a hyperplane strictly separating x from s : Find a hyperplane H(α, β) strictly separating x from S; i.e., x is in the interior of H +(α, β), and S is in the interior H -(α, β).
Worst degradation and loss : In the region where your live (Southeastern/GA), which types of ecosystems have experienced the worst degradation and loss? What steps could be taken to restore them?
What are two ecosystems in the region : What are two ecosystems in the region where you live (Southeastern US) where you live? What are some examples of intrinsic and instrumental values provided by the ecosystems?
What is the operating net cash flow in year one : The president of Real Time Ltd has asked you to evaluate the proposed acquisition of a new computer system. The system's price is $39,000, and will be depreciated straight-line over a three year life. Purchase of the system would require an increase ..
Implement an interpolation search : Above the current value of lower. Implement an interpolation search and compare its performance with the log2 n performance of the binary search. Use a uniform random number generator to produce the array a. Note that this array will need to be sor..
Presence of air bubbles a sign of contamination : Microbiology 1. For what specific purpose was gram staining developed for? what is it used for today? 2. Why is the presence of air bubbles a sign of contamination?
Can the person be charged with multiple violations : Can the person be charged with multiple violations of a state statute that makes it a crime to "knowingly obtain, possess, use, or transfer a means of identification or financial information of another?" Why or why not? See State vs. Leyda, 138 P...
Partitions of a two dimensional simplex : For each of the given partitions of a two-dimensional simplex, determine whether or not it is a simplicial partition. Justify your answer.

Reviews

Write a Review

Financial Management Questions & Answers

  After-tax yield on preferred stock

Van Corporation has a corporate tax rate equal to 36%. The company recently purchased preferred stock in another compan.y The preferred stock has n 8% before-tax yield. What is Van Corporation's after-tax yield on the preferred stock?

  How much would shulas profit increase

Bubba's Steakhouse has budgeted the following costs for a month in which 1,600 steak dinners will be produced and sold: Materials, $4,080; hourly labor (variable), $5,200; rent (fixed), $1,700; depreciation, $780; and other fixed costs, $420. Each st..

  Calculate the maximum number of votes

If there are 10 directors to be elected and a shareholder owns 150 shares, calculate the maximum number of votes that he or she can cast for a favorite candidate under each of the voting methods. Maximum Number of Votes a. Majority voting b. Cumulati..

  Calculating rates of return

Assuming you purchased a $50 face value bond, what is the exact rate of return you would earn if you held the bond for 20 years until it doubled in value? If you purchased a $50 face value bond in early 2014 at the then current interest rate of .10 p..

  What is the days sales in inventory

Bobaflex Corporation has ending inventory of $686,373 and cost of goods sold for the year just ended was $4,765,135. What is the inventory turnover? What is the days’ sales in inventory? How long on average did a unit of inventory sit on the shelf be..

  Complete the 2003 balance sheet for okeefe industries

Using ratios Complete the 2003 balance sheet for O'Keefe Industries using the information that follows it. - Sales totaled $1,800,000.

  The change in exchange rate

Suppose the U.S. dollar substantially depreciates against the Japanese yen. The change in exchange rate Can have a significant economic consequences for U.S. firms Can have a significant economic consequences for Japanese firms Can have a significant..

  Each bond has a face value

Atlantis Fisheries issues zero coupon bonds on the market at a price of $529 per bond. Each bond has a face value of $1,000 payable at maturity in 16 years. It is callable in 8 years at a call price of $650. Using semi annual compounding, what is the..

  What is the present value of a loan that calls for payment

What is the present value of a loan that calls for the payment of $500 per year for 6 years if the discount rate is 10% and the first payment will be made one year from now. how would your answer change if the 500 per year occurred for 10 years?

  Variable cost per unit projection for a project

Les is concerned that his variable cost per unit projection for a project may not be reliable. Which type of analysis will help him determine the effect that an incorrect variable cost estimate will have on the final outcome of the project?

  What is the difference in cash flow between the two firms

The Jupiter Corporation has a gross profit of $743,000 and $276,000 in depreciation expense. The Saturn Corporation also has $743,000 in gross profit, with $47,700 in depreciation expense. Selling and administrative expense is $164,000 for each compa..

  Forecasting cash flows

Your company is forecasting cash flows of $15 million next year, $25 million in year 2 and $40 million in year 3. After that growth in cash flows is expected to level out at 5% per year. Your company has $150 million in marketable securities and $350..

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