Reference no: EM13938938

1. ABC Corporation is considering an expansion project. The necessary equipment could be purchased for $29,388 and shipping and installation costs are another $717. The project will also require an initial $4,436 investment in net working capital. The company's tax rate is 40%. What is the project's initial investment outlay? 

Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

2. A project requires $360,566 of equipment that is classified as 7-year property. What is the book value of this asset at the end of year 5 given the following MACRS depreciation allowances, starting with year one: 14.29, 24.49, 17.49, 12.49, 8.93, 8.92, 8.93, and 4.46 percent? 

Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then net A project requires $434,688 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, 8.92, 8.93, and 4.46 percent? 

Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.er as 12.35 in the answer box.

3. A project requires $433,268 of equipment that is classified as 7-year property. What is the depreciation expense in year 3 given the following MACRS depreciation allowances, starting with year one: 14.29, 24.49, 17.49, 12.49, 8.93, 8.92, 8.93, and 4.46 percent? 

Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

4. A project requires $434,688 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, 8.92, 8.93, and 4.46 percent? 

Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

5. ABC Company purchased $22,856 of equipment 4 years ago. The equipment is 7-year MACRS property. The firm is selling this equipment today for $4,685. What is the aftertax cash flow from this sale if the tax rate is 25 percent? The MACRS allowance percentages are as follows, commencing with year one: 14.29, 24.49, 17.49, 12.49, 8.93, 8.92, 8.93, and 4.46 percent. 

Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

 

6. ABC Company purchased some new equipment 2 years ago for $392,323. Today, it is selling this equipment for $30,301. What is the aftertax cash flow from this sale if the tax rate is 35 percent? The MACRS allowance percentages are as follows, commencing with year one: 20.00, 32.00, 19.20, 11.52, 11.52, and 5.76 percent. 

Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

7. ABC Company has a proposed project that will generate sales of 495 units annually at a selling price of $216 each. The fixed costs are $5,376 and the variable costs per unit are $44. The project requires $31,038 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 $31,038/4. The salvage value of the fixed assets is $6,900 and the tax rate is 30 percent. What is the operating cash flow for year four? 

Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

8.A project has an initial requirement of $199,615 for new equipment and $9,833 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 $136,094. All of the net working capital will be recouped at the end of the project. The annual operating cash flow is $99,835 and the cost of capital is 5% What is the project's NPV if the tax rate is 27%? 

Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

9. ABC Inc. has estimated the following revenues and expenses related phase I of a proposed new housing development? Incremental sales= $6,175,555, total cash expenses $3,101,903, depreciation $355,192, taxes 28%, interest expense, $200,000. What are the operating cash flows?

Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

10. ABC Company purchased $44,198 of equipment 5 years ago. The equipment is 7-year MACRS property. The firm is selling this equipment today for $7,537. What is the aftertax cash flow from this sale if the tax rate is 28 percent? The MACRS allowance percentages are as follows, commencing with year one: 14.29, 24.49, 17.49, 12.49, 8.93, 8.92, 8.93, and 4.46 percent. 

Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

11. ABC has a proposed project which will generate sales of 174 units at a selling price of $277 each. The fixed costs are $10,212 and the variable costs per unit are $75. The project requires $101,184 of machinery which will be depreciated on a straight-line basis over the 5-year life of the project. That is, depreciation each year is $101,184/5.The tax rate is 23%. What is the operating cash flow for year 5?

Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

12. ABC Inc. has estimated the following revenues and expenses related phase I of a proposed new housing development? Incremental sales= $519,380, total cash expenses $355,834, depreciation $48,421, taxes 25%. What are the operating cash flows?

Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

13. ABC Compay has the following projections for Year 1 of a capital budgeting project. 

             Year 1 Incremental Projections: 

 

            Sales                                              $873,666

 

            Variable Costs                               $124,931

 

            Fixed Costs                                   $39,393

 

            Depreciation Expense                   $83,143 

 

            Tax Rate                                        32%

 

 Calculate the operating cash flow for Year 1. 

Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

14. A project has an initial requirement of $207,175 for new equipment and $8,202 for net working capital. The installation costs to get the new equipment in working condition are 11,713. The fixed assets will be depreciated to a zero book value over the 4-year life of the project and have an estimated salvage value of $97,069. All of the net working capital will be recouped at the end of the project. The annual operating cash flow is $111,817 and the cost of capital is 13% What is the project's NPV if the tax rate is 37%? 

Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

15.  A project has an annual operating cash flow of $18,887. Initially, this 4-year project required $4,051 in net working capital, which is recoverable when the project ends. The firm also spent $10,000 on equipment to start the project. This equipment will have a book value of $3,524 at the end of year 4. What is the total cash flow for year 4 of the project if the equipment can be sold for $5,890 and the tax rate is 35%? 

Enter your answer rounded off to two decmal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.