1. Textron is considering a NEW project. The financial projections are as follows:Year 0Year 124,0007,000Year 224,000Year 3Sales24,000Total Costs7,0007,000DepreciationCapital Investment (or Cost of Equipment)Working Capital (Requirements/Levels)10,00010,00010,00040,000200025001000The Equipment will be sold at the end of Year 3 for 11,000. The relevant tax rate is 35%.Compute the cash flows for the project.Please select file(s) Select file(s)

Net cash flows = Profit after tax + depreciation + Salvage -Tax on salvage - weoking capital Profi…

1. Textron is considering a NEW project. The financial projections are as follows: Year 0 Year 1 24,000 Year 2 24,000 Year 3 24,000 Sales Total Costs 7,000 7,000 7,000 Depreciation Capital Investment (or Cost of Equipment) Working Capital (Reguirements/Levels) 10,000 10,000 10,000 40,000 2000 2500 1000 The Equipment will be sold at the end of Year 3 for 11,000. The relevant tax rate is 35%. Compute the cash flows for the project. Please select file(s) Select file(s)

1. Textron is considering a NEW project. The financial projections are as follows: Year 0 Year 1 24,000 Year 2 24,000 Year 3 24,000 Sales Total Costs 7,000 7,000 7,000 Depreciation Capital Investment (or Cost of Equipment) Working Capital (Reguirements/Levels) 10,000 10,000 10,000 40,000 2000 2500 1000 The Equipment will be sold at the end of Year 3 for 11,000. The relevant tax rate is 35%. Compute the cash flows for the project. Please select file(s) Select file(s)

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section10.A: Mutually Exclusive Investments Having Unequal Lives

Problem 2P

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