Find your question
and Get expert's answers*
Homework Help
*Click here to submit
Refer a Friend
Discount up to 15%*
Prepared References
Save up to 50%*
Homework Help >> Finance Basics
  Calculating net operating cash flow for the initial year

Question1)

Assume new instruments for a firm cost $18,000 with an extra installation fee of $2,000, both of which are depreciable. Complete the depreciation schedule shown below using the Modified Accelerated Cost Recovery System (MACRS) 3-year class.

Year    Rate    Basis    Depreciation
1           
2           
3           
4           

Question2)

A company is evaluating a proposed 4-year project.  The depreciable cost would include the following: $300,000 for the equipment, $20,000 for shipping, and $30,000 for installation. The depreciation life is under the MACRS 3-year class, with a salvage value of $45,000. The inventories would rise by $18,000 and accounts payable would rise by $3,000. Additionally, the new sales are estimated to be 150,000 units per year at $2.25 per unit. There is a variable operating cost that is 60% of sales and the company’s marginal tax rate is 35%.  Complete parts (a) through (c) below.

a) Find out the net operating cash flow for the initial year (Year 0).

b) Find out the net operating cash flow for Years 1, 2, and 3.

c) Find out the net terminal year cash flow.




Answer

Calculating net operating cash flow for the initial year


Request for solution file

Course: Finance Basics

Ref. No:- TGS01776

Like US:-
Assignment Help

Ask an Expert & Get Answer

  • Quality work delivery
  • 100% Plagiarism free
  • Time on delivery
  • Privacy of work
Order Now
More Finance Basics Questions


Firm’s weighted average cost of capital (WACC) is evaluated at 15%. Should company construct new and enhanced production facility?
China American Manufacturing has a beta of 1.50, the risk-free rate of interest is currently 12 percent, and the required return on the market portf
If you purchase a share of common stock, you would probably expect to receive dividends plus an eventual capital gain. Would the distribution between
There are many data sources that can help with KYC (Know Your Customer) procedures. Discuss where the line is drawn between KYC and the invasion of pr
Define the term "incremental cash flow." Since the project will be financed in part by debt, should the cash flow statement include interest expense
Examine the concept of time value of money in relation to corporate managers. Propose two (2) methods in which time value of money can help corporat
The financial statements of Lioi Steel Fabricators are shown below-both the actual results for 2010 and the projections for 2011. Free cash flow is
Interpreting relationship between net income and cash flow from operations. Combined data for three years for two firms appear below
Management expects productivity gains and cost savings over the next several years. If, as a result of this investment, the firm is expected to gene
How must the contingency be reported in the financial statements of Shinobi Inc.?