A project generates revenues of $10,000, has cash expenses of $800, and depreciation charges of $500 in a particular year. The firm's tax rate is 25%. What is the firm's net income or cash flow from operations?
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A project generates revenues of $10,000, has cash expenses of $800, and
What is the firm's net income or
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- The Moore Corporation has operating income (EBIT) of 750,000. The companys depreciation expense is 200,000. Moore is 100% equity financed, and it faces a 40% tax rate. What is the companys net income? What is its net cash flow?Your division is considering two investment projects, each of which requires an up-front expenditure of 25 million. You estimate that the cost of capital is 10% and that the investments will produce the following after-tax cash flows (in millions of dollars): a. What is the regular payback period for each of the projects? b. What is the discounted payback period for each of the projects? c. If the two projects are independent and the cost of capital is 10%, which project or projects should the firm undertake? d. If the two projects are mutually exclusive and the cost of capital is 5%, which project should the firm undertake? e. If the two projects are mutually exclusive and the cost of capital is 15%, which project should the firm undertake? f. What is the crossover rate? g. If the cost of capital is 10%, what is the modified IRR (MIRR) of each project?Banyan Industries has two divisions, a tax rate of 30%, and a minimum rate of return of 20%. Division A has a weighted average cost of Capital of 9.5% and is looking at a new project that will generate a profit of $1,200,000 from a machine that costs $4,000,000. Division B has a weighted average cost of capital of 9.5% and is looking at a new project that will generate a profit of $1,350,000 from a machine that costs $5,000.000. A. Calculate the EVA for each of Banyans divisions. B. Calculate the RI for each of Banyans division. C. If Banyan uses EVA to evaluate the projects, which division has the better project and by how much? D. If Banyan uses RI, which division has the better project and by how much? E. What are some of the reasons for the similarity or difference that you found in the use of EVA versus RI?
- Manzer Enterprises is considering two independent investments: A new automated materials handling system that costs 900,000 and will produce net cash inflows of 300,000 at the end of each year for the next four years. A computer-aided manufacturing system that costs 775,000 and will produce labor savings of 400,000 and 500,000 at the end of the first year and second year, respectively. Manzer has a cost of capital of 8 percent. Required: 1. Calculate the IRR for the first investment and determine if it is acceptable or not. 2. Calculate the IRR of the second investment and comment on its acceptability. Use 12 percent as the first guess. 3. What if the cash flows for the first investment are 250,000 instead of 300,000?The Fleming Manufacturing Company is considering a new investment. Financial projections for the investment are tabulated below. The corporate tax rate is 22 percent. Assume all sales revenue is received in cash, all operating costs and income taxes are paid in cash, and all cash flows occur at the end of the year. All net working capital is recovered at the end of the project. Year 0 Year 1 Year 2 Year 3 Year 4 Investment $ 41,000 Sales revenue $ 21,000 $ 21,500 $ 22,000 $ 19,000 Operating costs 4,400 4,500 4,600 3,800 Depreciation 10,250 10,250 10,250 10,250 Net working capital spending 470 520 570 470 ? a. Compute the incremental net income of the investment for each year. Year 1, Year 2, Year 3, Year 4 b. Compute the incremental cash flows of the investments for each year. Year 1, Year 2, Year 3, Year 4 c. Suppose the appropriate discount rate…Assume Lasher’s Kitchen has pretax earnings of $150,000 after depreciation expense of $30,000. If the firm’s tax rate is 25 percent, what is its cash flow from operations? Round your answer to the nearest dollar. $
- In a project, revenue was $400 millions and costs was $200millions . Tax rate of the company was 30%. What will be post tax cash flows.The Fleming Manufacturing Company is considering a new investment. Financial projections for the investment are tabulated below. The corporate tax rate is 23 percent. Assume all sales revenue is received in cash, all operating costs and income taxes are paid in cash, and all cash flows occur at the end of the year. All net working capital is recovered at the end of the project. Year 0 Year 1 Year 2 Year 3 Year 4 Investment $ 27,000 Sales revenue $ 14,000 $ 14,500 $ 15,000 $ 12,000 Operating costs 3,000 3,100 3,200 2,400 Depreciation 6,750 6,750 6,750 6,750 Net working capital spending 330 380 430 330 ? a. Compute the incremental net income of the investment for each year. (Do not round intermediate calculations.)The Fleming Manufacturing Company is considering a new investment. Financial projections for the investment are tabulated below. The corporate tax rate is 25 percent. Assume all sales revenue is received in cash, all operating costs and income taxes are paid in cash, and all cash flows occur at the end of the year. All net working capital is recovered at the end of the project. Year 0 Year 1 Year 2 Year 3 Year 4 Investment $ 34,000 Sales revenue $ 17,500 $ 18,000 $ 18,500 $ 15,500 Operating costs 3,700 3,800 3,900 3,100 Depreciation 8,500 8,500 8,500 8,500 Net working capital spending 400 450 500 400 ? a. Compute the incremental net income of the investment for each year. (Do not round intermediate calculations.) b. Compute the incremental cash flows of the investment for each year. (Do not round intermediate calculations. A…
- This year, FCF, Inc., has earnings before interest and taxes of $10 million, depreciation expenses of $1 million, capital expenditures of $1.5 million, and has increased its net working capital by $500,000. If its tax rate is 35%, what is its free cash flow?A project has annual depreciation of $25,900, costs of $102,500, and sales of $151,500. The applicable tax rate is 35 percent. What is the operating cash flow?Consider a company with EBIT of $450,000, tax rate of 25%, depreciation and amortization expenses of $60,000, capital expenditures of $120,000, acquisition expenses of $80,000 and change in working capital of negative $30,000. How much is its free cash flow during that period? Round to the nearest whole dollar.
