Y is the projects relevant expected cash flow for npv


Middlefield Motors is evaluating project Z. The project would require an initial investment of 76,000 dollars that would be depreciated to 11,000 dollars over 8 years using straight-line depreciation. The first annual operating cash flow of 27,500 dollars is expected in 1 year, and annual operating cash flows of 27,500 dollars are expected each year forever. Middlefield Motors expects the project to have an after-tax terminal value of 388,000 dollars in 4 years. The tax rate is 15 percent. What is (X+Y)/Z if X is the project’s relevant expected cash flow for NPV analysis in year 4, Y is the project’s relevant expected cash flow for NPV analysis in year 5, and Z is the project’s relevant expected cash flow for NPV analysis in year 3? Round your answer to 2 decimal places (for example, 2.89, 0.70, or 1.00).

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Financial Management: Y is the projects relevant expected cash flow for npv
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