Question 1
ABC Inc. has estimated the following revenues and expenses related phase I of a proposed new housing development? Incremental sales= $5,081,953, total cash expenses $3,212,751, depreciation $623,167, taxes 33%, interest expense, $200,000. What is the operating cash flow?
Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.
Question 2
A project requires $434,624 of equipment that is classified as 7-year property. What is the depreciation expense in year 3 given the following MACRS depreciation allowances, starting with year one: 14.29, 24.49, 17.49, 12.49, 8.93, 8.92, 8.93, and 4.46 percent?
Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.
Question 3
ABC Compay has the following projections for Year 1 of a capital budgeting project.
Year 1 Incremental Projections:
Sales $785,719
Variable Costs $91,387
Fixed Costs $65,859
Depreciation Expense $127,104
Tax Rate 36%
What is the Operating Cash Flow?
Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.
Question 4
The net working capital invested in a project is generally:
an opportunity cost.
a sunk cost.
depreciated to a zero balance over the life of the project.
recovered at the end of the project.
recovered at the start of the project.