Book3

.xlsx

School

University of Central Florida *

*We aren’t endorsed by this school

Course

5130

Subject

Finance

Date

Feb 20, 2024

Type

xlsx

Pages

Uploaded by GIRALDOD55

Problem Set 1 Initial outlay = Purchase Price + Shipping Cost + Initial investment Purchase Price $ 100,000.00 Shipping Cost $ 5,000.00 Investment $ 4,000.00 Initial Outlay $ 109,000.00 A company is considering purchasing a machine for $100,000. Shipping costs would be another $5,000. The project would require an initial investment in net working capital of $4,000 which would be recouped at the end of the project. What is the project's initial outlay?

Sales $ 18,000,000.00 Operating Cost $ 9,000,000.00 Depreciation $ 4,000,000.00 Profit Before Tax $ 5,000,000.00 Tax Expense $ 2,000,000.00 Profit After Tax $ 3,000,000.00 Depreciation $ 4,000,000.00 Operating Cash Flow $ 7,000,000.00 Annual Depreciation = Cost of Equipment/Useful Life Cost of Equipmet $ 250,000.00 Useful Life 10 years Annual Depreciation $ 25,000.00 Sales $ 150,000.00 Variable Cost $ 35,000.00 Fixed Cost $ 40,000.00 Depreciation $ 25,000.00 Net Operating Income $ 50,000.00 Tax Expense @ 25% $ 12,500.00 Net After Tax $ 62,500.00 Depreciation $ 25,000.00 Operating Cash Flow $ 87,500.00 A) A project will generate sales of $18 million. The operating costs (not including depreciation) are The depreciation expense is $4 million. If the tax rate is 40%, what is the operating cash flo B) A project will generate sales of $150,000. The variable costs are $35,000 and the fixed costs are $ project will use an equipment worth $250,000 that will be depreciated on a straight-line basis to a value over a 10-year life of the project.The interest expense is estimated to be $10,000. If the tax ra what is the operating cash flow?

Problem Set 2 Sales $ 250,000.00 Cash Expense $ 80,000.00 Depreciation $ 35,000.00 Net Operating Income $ 135,000.00 Tax Expense @ 25% $ 33,750.00 Net After Taxes $ 101,250.00 Depreciation $ 35,000.00 Operating Cash Flow $ 136,250.00 Sales 140*100 $ 14,000.00 Variable Cost 35*100 $ 3,500.00 Fixes Cost $ 10,000.00 Depreciation $ 10,000.00 Net Operating Income $ (9,500.00) Tax Expense @ 25% $ (2,375.00) Net After Taxes $ (7,125.00) Depreciation $ 10,000.00 Operating Cash Flow $ 2,875.00 e $9 million. ow? C) A project will generate sales of $250,000. The tot worth $350,000 that will be depreciated on a straight-li project will require an initial investment in net working If the tax rate is 25%, $40,000. The zero book rate is 25%, D) A project will generate sales of 100 units annually and the fixed costs are $10,000. The project will use an line basis to a zero book value over a 10-year life of th

tal cash expenses are $80,000. The project will use an equipment ine basis to a zero book value over a 10-year life of the project. The g capital is $5,000 which will be recouped at the end of the project. , what is the operating cash flow? at a selling price of $140 each. The variable costs per unit are $35 n equipment worth $100,000 that will be depreciated on a straight- he project. If the tax rate is 25%, what is the operating cash flow?

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version