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.

Ask an Expert for Solution

Ask an Expert for Answer Calculating net operating cash flow for the initial year

Request for Solution Files

Expected delivery within 24 Hours

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


Phelps Glass Inc. has reported the following financial data: net revenues of $10 million, variable costs of $5 million, controllable fixed costs of
The photographic analogy for a balance sheet is a snapshot, and for the income statement and the statement of cash flows it is a motion picture? E
After Year 4, the dividends will grow at 6% forever. Investors require a rate of return of 14%. What price will they pay for the stock?
During the past year, the consumer price indexes (CPI) of the United States and the Eurozone rose by 3 percent and 4 percent, respectively. If PPP h
The Motor Works is considering an expansion project with estimated annual fixed costs of $71,000, depreciation of $38,500, variable costs per unit o
question 1 prepare the pro forma cash flow statements for bloomington clinics for five years into the future using the data provided in the case plus
What are the challenges of managing IT infrastructure and management solutions.Name and describe the management challenges posed by IT infrastructure.
Develop a set of family circumstances where each of term insurance and whole life insurance are the most appropriate type of policy to meet the consum
A stock price is $30, the expected return is 18% per annum and the volatility is 20% per annum. What is the mean of the logarithm of the stock price
A project that provides annual cash flows of $17,300 for nine years costs $79,000 today. Is this a good project if the required return is 8 percent? W