What is the amount of the after-tax cash flow from the sale


XYZ Corp. is considering a new project. The project will require $325886 for new fixed assets, $167108 for additional inventory and $40531 for additional accounts receivable. Short-term debt is expected to increase by $94456 and long-term debt is expected to increase by $282635. The project has a 5-year life. The fixed assets will be depreciated straight-line to a zero book value over the life of the project. At the end of the project, the fixed assets can be sold for 25% of their original cost. The net working capital returns to its original level at the end of the project. The project is expected to generate annual sales of $558074 and costs of $380282. The tax rate is 35% and the required rate of return is 15%.

What is the amount of the after-tax cash flow from the sale of the fixed assets at the end of this project? (Round answer to 0 decimal places, do not round intermediate calculations)

Solution Preview :

Prepared by a verified Expert
Business Management: What is the amount of the after-tax cash flow from the sale
Reference No:- TGS02765314

Now Priced at $10 (50% Discount)

Recommended (92%)

Rated (4.4/5)