1- BROWN Co. is determining whether they should purchase a new machine. The machine cost is $380,000, installation costs are $20,000. MACRS 3 years. Tax rate 30% WACC 12%. The expected EBITDA for this 3 year project is $160,000, $230,000, $100,000 respectively. The machine could be sold at the end of the 3 years for $60,000. What is the initial investment for this project? 2- BROWN Co. is determining whether they should purchase a new machine. The machine cost is $380,000, installation costs are $20,000. MACRS 3 years. Tax rate 30% WACC 12%. The expected EBITDA for this 3 year project is $160,000, $230,000, $100,000 respectively. The machine could be sold at the end of the 3 years for $60,000. What is the OCF (operating cash flow) for year 1 for this project?
1- BROWN Co. is determining whether they should purchase a new machine. The machine cost is $380,000, installation costs are $20,000. MACRS 3 years. Tax rate 30% WACC 12%. The expected EBITDA for this 3 year project is $160,000, $230,000, $100,000 respectively. The machine could be sold at the end of the 3 years for $60,000. What is the initial investment for this project? 2- BROWN Co. is determining whether they should purchase a new machine. The machine cost is $380,000, installation costs are $20,000. MACRS 3 years. Tax rate 30% WACC 12%. The expected EBITDA for this 3 year project is $160,000, $230,000, $100,000 respectively. The machine could be sold at the end of the 3 years for $60,000. What is the OCF (operating cash flow) for year 1 for this project?
Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter11: Cash Flow Estimation And Risk Analysis
Section: Chapter Questions
Problem 8P: The Rodriguez Company is considering an average-risk investment in a mineral water spring project...
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