1.) ABC Company has a proposed project that will generate sales of 464 units annually at a selling price of $176 each. The fixed costs are $5,753 and the variable costs per unit are $94. The project requires $29,415 of equipment that will be depreciated on a straight-line basis to a zero book value over the 4-year life of the project. That is, depreciation each year is $29,415/4. That tax rate is 29 percent. What is the operating cash flow?
2.) ABC Corporation is considering an expansion project. The necessary equipment could be purchased for $20,895 and shipping and installation costs are another $723. The project will also require an initial $4,374 investment in net working capital. The company's tax rate is 40%. What is the project's initial investment outlay?
3.) A project has an initial requirement of $210,739 for new equipment and $9,766 for net working capital. The installation costs to get the new equipment in working condition are 2,237. The fixed assets will be departed to a zero book value over the 4-year life of the project and have an estimated salvage value of $141,243. All of the net working capital will be recouped at the end of the project. The annual operating cash flow is $107,970 and the cost of the capital is 18%. What is the projects NPV if the tax rate is 35%?
4.) ABC has a proposed project which will generate sales of 135 units at a selling price of $265 each. The fixed costs are $14,209 and the variable costs per unit are $67. The project requires $194,948 of machinery which will be depreciated on a straight-line basis over the 5-year life of the project. That is, depreciation each year is $194,948/5. The tax rate is 28%. What is the operating cash flow?
operating cash flow 81664
25062 Purchase Cost
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