A project’s after-tax operating cash flow is $200,000 per year, with operating costs of $100,000 and depreciation of $20,000 per year. The firm’s marginal tax rate is 40%. What are the annual sales revenues from this project (rounded to the nearest dollar)? Select one: a. $200,000 b. $377,143 c. $394,286 d. $420,000 e. $640,000

Q: Laurel’s Lawn Care Ltd. has a new mower line that can generate revenues of $120,000 per year. Direct…

A: Given: Revenue = $120,000 Cost = $40,000 Fixed cost = $15,000 Cost of factory = $1 million or…

Q: You are evaluating a project that costs $1,500,000; has a six-year life. Assume that depreciation is…

A: Net Present Value (NPV) refers to the difference between this value of money inflows and cash…

Q: A project will increase sales by $92,800 and cash expenses by $53,200. The project will cost $89,000…

A: Cash Flows: Cash flows are the cash generated from the operation of the business organization. In…

Q: The company has a 25% tax rate, and its WACC is 10%. Write out your answers completely. For example,…

A: Operating Cash Flow: It is the amount of cash generated from normal business operations. Cash from…

Q: Skywards Inc., an airline caterer, is purchasing refrigerated trucks at a total cost of $3.25…

A: Given: Initial investment is $3.25 million Net income = $750,000 Depreciation = $650,000 Cost of…

Q: An analyst at Stoneville Corporation estimates that a project has the following after-tax net cash…

A: Capital budgeting is the process by which a corporation examines potential large projects or…

Q: A capital budgeting project is expected to generate an increase to annual operating cash flow of…

A: According to capital budgeting process, different projects are evaluated for the purpose of adding…

Q: You have been asked by MPAC Ltd to analyse two projects, Xand Y. Each project costs £1,000,000, and…

A: We will analyze these projects by calculating Net Present Value of each of the projects. Calculation…

Q: Answer each independent question, (a) through (e), below. a. Project D costs $10,000 and will…

A: book rate of return based on the average book value=Average net profit/Average investment…

Q: you are trying to decide whether to accept or reject a one-year project. The project is estimated to…

A: Computation:

Q: 19

A: The formula to calculate annual depreciation using straight line is given below:

Q: A company expects to need to increase their net working capital by $200,000 at the beginning of a…

A: At the beginning of the project, the investment in working capital of 200000 is a cash outflow.

Q: a. Project B costs $10,000 and will generate after-tax cash inflows of $900 in year 1, $2,400 in…

A: A. Calculation of payback period (in years): 4 years (approx) End Of year cash inflows cash…

Q: Hall Service Corporation is considering a project that will require $39,000 in net working capital…

A: Annual sales = $78500 Cash costs = $41000 Annual depreciation ($68000 / 4) = $17000 Tax rate = 0.25…

Q: What is the NPV of a 6-year project that costs $100,000, has annual revenues of $50,000 and costs of…

A: The NPV is the present value of the future net benefits less the initial costs.

Q: A company is trying to estimate the first-year cash flow (at Year 1) for a proposed project. The…

A: The cash flow of the project can be calculated as the after tax cash flow plus depreciation tax…

Q: A project has annual depreciation of $25,900, costs of $102,500, and sales of $151,500. The…

A: To find: Operating cash flow

Q: Kansas furniture Corporation (KFC) is evaluating a capital budgeting project that costs $34,000 and…

A: Given information: Project costs $34,000 After tax cash flow $14,150 for 3 years Rate of return is…

Q: What is the incremental after-tax operating cash flow (OCF)

A: Incremental sales = $2,400,000 Incremental expenses = $1,400,000 Tax rate = 32% Initial Investment =…

Q: Mario Kat, Inc plans a new project.  Calculate its IRR.  Assume that its initial after tax cost is…

A: Internal rate of return is an important concept in corporate finance. IRR is the rate at which the…

Q: What is the NPV of a 6-year project that costs $100,000, has annual revenues of $50,000 and costs of…

A: To select a project, the net present value of cash inflows and outflows are calculated and then…

Q: An investment has an initial cost of $3.2 million. This investment will be depreciated by $900,000 a…

A: The average accounting return or average rate of return is an accounting metric which helps in…

Q: Calculate the NPV for the following project, assuming that the cost of capital is 15 percent and…

A: Net present value is the difference between the cash inflow and the present value of cash outflow…

Q: 1. Textron is considering a NEW project. The financial projections are as follows: Year 0 Year 1…

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

Q: A cost-cutting project will decrease costs by $65,100 a year. The annual depreciation will be…

A: Amount saved due to decrease in cost is $65,100 per year. Annual Depriciation is $15000 Tax rate is…

Q: considering the purchase of a machine costing P700,000 with a useful life of 10 years. Annual cash…

A: Solution a: Annual depreciation = P700,000 / 10 = P70,000 Annual income before tax = Annual cash…

Q: St. John's & Sons Sanitation Services is evaluating a project that will increase annual sales by…

A: Operating cashflow = (Increase Annual sales - Annual Cash cost) * (1-tax rate) + tax benefit on…

Q: A new project will decrease costs by $58,500 a year. The annual depreciation on the project's fixed…

A: Change in Operating cash flow of the project can be calculated as below:

Q: (2) What is the book rate of return based on the average book value? (Round your answer to 2 decimal…

A: The difference between the current value of cash and the future value of cash is referred to as net…

Q: The Jacob Chemical Company is considering building a new potassium sulfate plant. The following cash…

A: Period Cash outlay ($) Discount Factor @12% Net investment ($) 0 4,000,000 1 4,000,000 1…

Q: Your company is currently considering two investment projects. Each project requires an upfront…

A: Payback period is the number of years it takes to recover the investment.Here,A = Last period or…

Q: A new project is expected to generate annual revenues of $114,500, variable costs of $73,600, and…

A: Annual revenue is $114,500. Annual variable cost is $73,600. Annual fixed cost is $14,000. Annual…

Q: Bennett Company has a potential new project that is expected to generate annual revenues of $206.600…

A: Annual Operating Cash Flow: It is a measure of  how much  cash generated by a company's typical…

Q: A capital project requires a $50,000 increase in working capital. It also requires equipment at a…

A: Project's initial cashflow = Increase in working capital + equipment cost + installation cost +…

Q: A new project will generate sales of $97 million, costs of $49 million, and depreciation expense of…

A: Given: Sales = $97 mn Costs = $49 mn Depreciation = $10 mn

Q: A project requires an initial investment of $100,000 and is expected to produce a cash inflow before…

A: Internal rate of return is the exact return expected by an investor, it wholly ignores the…

Q: You are analyzing a project and have developed the following estimates. The depreciation is $88,000…

A: In worst case scenario, lower bound should be considered for unit sales and price per unit and upper…

Q: ABC company has a budgeting project. Machinery costs $60,000,000 with a 6 year life. Sales are…

A: Introduction Net Present Value(NPV): Net present value is a tool of Capital budgeting to analyze…

Q: Your company, MCU Inc., is considering a new project whose data are shown below. What is the…

A: Cash flow means net cash and cash equivalent transferred in or out of the organization.

Q: What is the payback period (in years) for this investment assuming that the cash inflows occur…

A: Payback Period: It is the project's period in which it recovers its cost of initial outlay. Hence, a…

Q: Cols Communications is trying to estimate the first-year cash flow (at Year 1) for a proposed…

A: Following is the answer to the question