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%*
  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.


Course:- Finance Basics
Ref. No:- TGS01776

Get Answer

Like US:-


More Finance Basics Questions

A 5-year Treasury bond has a 5.2% yield. Compute yield on a corporate bond

Make the entry to record the accrued interest and the amortization of premium on December 31, 2012, by using the straight-line process

An international investment bank oversees a USA investment portfolio with total assets of $25billion. The portfolio has 15% of total assets allocated to foreign investments, which include both International stocks and bonds.

Its really helpful guide for me.
Posted on: December 12, 2012
Thanks a lot for your expert's assistance..
Posted on: Feb 2, 2013
Post Comment
Assignment Help