A proposed new investment has projected sales of $515,000. Variable costs are 36percent of sales, and fixed costs are $173,000; depreciation is $46,000. Prepare a proforma income statement assuming a tax rate of 21 percent. What is the projected netincome? (Do not round intermediate calculations.)SalesVariable costsFixed costsDepreciationEBTTaxesNet income

The variable costs are the expenses that change in direct proportion to the level of production or…

Answered: A proposed new investment has projected…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter11: Capital Budgeting And Risk

Section: Chapter Questions

Problem 16P

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A proposed new investment has projected sales of $635,000, Variable Costs are 44% of sales, and Fixed Costs are $193,000, depreciation is $54,000. Prepare a pro-forma income statement assuming a tax rate of .34%. What is the projected EBITDA, what is NET INCOME and OPERATING CASH FLOW
A proposed new investment has projected sales of $515,000. Variable costs are 41 percent of sales, and fixed costs are $127,000; depreciation is $49,000. Assuming a tax rate of 21 percent, what is the projected net income?
Chadron Motors is reviewing a project with sales of 6,200 units, ±2 percent, at a sales price of $29, ±1 percent, per unit. The expected variable cost per unit is $11, ±3 percent, and the expected fixed costs are $85,578, ±1 percent. The depreciation expense is $68,000 and the tax rate is 21 percent. What is the net income under the worst-case scenario? A. $4,696 B. –$28,704 C. $15,846 D. −$39,713 E. −$38,578
A project has fixed costs of $400 per year, depreciation charges of $400 a year, annual revenue of $3,600, and variable costs equal to two-thirds of revenues. a. If sales increase by 17%, what will be the percentage increase in pretax profits? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) b. What is the degree of operating leverage of this project? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Appalachian Crafts is analyzing a project with expected sales of 18,900 units, ±2 percent. The expected variable cost per unit is $23 and the expected fixed costs are $52,000. Cost estimates are considered accurate within a range of ±1 percent. The depreciation expense is $18,400. The sale price is estimated at $54 a unit, ±2 percent. What is the total dollar difference between the revenue using the optimistic sale price versus the expected sale price?
A project has fixed costs of $2,100 per year, depreciation charges of $600 a year, annual revenue of $10,800, and variable costs equal to two-thirds of revenues. a. If sales increase by 20%, what will be the percentage increase in pretax profits? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) What is the Pretax profits increase (%)? b. What is the degree of operating leverage of this project? (Do not round intermediate calculations. Round your answer to 2 decimal places.) What is the degree of operation leverage?
A new firm expects to generate Sales of $124,900. POINT BLANK has variable costs of $77,500, and fixed costs of $18,000. The per-year depreciation is $4,300 and the tax rate is 35 percent. What is the annual operating cash flow?
You are analyzing a project and have developed the following estimates: unit sales = 2,150, price per unit = $84, variable cost per unit = $57, fixed costs per year = $13,900. The depreciation is $8,300 a year and the tax rate is 35 percent. What effect would an increase of $1 in the selling price have on the operating cash flow?
A proposed project has fixed costs of $88,000 per year. The operating cash flow at 11,300 units is $116,500. Ignore the effect of taxes. What is the degree of operating leverage?
A proposed project has fixed costs of $108,000 per year. The operating cash flow at 6,800 units is $96,600. Ignore the effect of taxes. a. What is the degree of operating leverage? (Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616.) b. If units sold rise from 6,800 to 7,300, what will be the new operating cash flow? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. If units sold rise from 6,800 to 7,300, what is the new degree of operating leverage? (Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616.)
A proposed project has fixed costs of $41,000 per year. The operating cash flow at 10,000 units is $67,000. a. Ignoring the effect of taxes, what is the degree of operating leverage? b. If units sold rise from 10,000 to 10,100, what will be the increase in operating cash flow? c.What is the new degree of operating leverage?
Bennett Company has a potential new project that is expected to generate annual revenues of $263,000, with variable costs of $144, 400, and fixed costs of $61,600. To finance the new project, the company will need to issue new debt that will have an annual interest expense of $25,000. The annual depreciation is $25,400 and the tax rate is 35 percent. What is the annual operating cash flow? Multiple Choice $127,490 $82,400 $180,212 $45,940 $40,890

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