Your local athletic center is planning a $1.32 million expansion to its current facility. This cost...

Your local athletic center is planning a $1.32 million expansion to its current facility. This cost will be depreciated on a straight-line basis over a 20-year period. The expanded area is expected to generate $624,000 in additional annual sales. Variable costs are 38 percent of sales, the annual fixed costs are $79,400, and the tax rate is 25 percent. The athletic center paid $125,000 on a feasibility study and estimates interest expenses to be $65,000 per year. The expansion of the athletic center will reduce the metered parking area and the athletic center will lose $32,000 annually from the loss in parking. What is the annual operating cash flow of this project?

Expert Solution

If you satisfied with my answer, Kindly hit LIKE Button

ekkarill92 answered 2 weeks ago

Your team continues its planning efforts for the Cascada Community Medical Center Prosthetics and Rehabilitation Expansion...

Your team continues its planning efforts for the Cascada Community Medical Center Prosthetics and Rehabilitation Expansion Project. As is required on projects using public funds, the request for proposal (RFP) documents have been issued, and you have scheduled a pre-bid conference for interested firms. This meeting is mandatory. Only proposals from firms who are represented at the pre-bid conference will be considered during the evaluation process. Your hope is that by answering questions before the bidding process, the proposal submission...

Your company is planning on expanding their current facility to increase the manufacturing of their products....

Your company is planning on expanding their current facility to increase the manufacturing of their products. The total cost is expected to be $100,000, and the company has decided to finance the project with short-term debt for the company an interest -bearing note or a zero-interest -bearing note. What are the key characteristics and differences between the two? Which one should the company decide to take on and why ? What effect will each bearing note have on the financial...

johny trout is planning a $540,000 expansion to its lake. this cost will be depreciated on...

johny trout is planning a $540,000 expansion to its lake. this cost will be depreciated on a straight line basis over a 10 year period. the lake is expected to generate $489,000 in additional annual sales. every year fixed costs are $129,400, with variable costs of $46% of sales, and a tax rate is 34%. what is the operating cash flow for the third year of this project? a. 106,906.65 b. $107,235.60

Julie Resler’s company is considering expansion of its current facility to meet increasing demand. If demand...

Julie Resler’s company is considering expansion of its current facility to meet increasing demand. If demand is high in the future, a major expansion will result in an additional profit of $800,000, but if demand is low there will be a loss of $500,000. If demand is high, a minor expansion will result in an increase in profits of $200,000, but if demand is low, there will be a loss of $100,000. The company has the option of not expanding....

The optical products division of Panasonic is planning a $3.5 million building expansion for manufacturing its...

The optical products division of Panasonic is planning a $3.5 million building expansion for manufacturing its powerful Lumix DMC digital zoom camera. If the company uses an interest rate of 16% per year, compounded monthly for all new investments, what is the uniform amount per quarter the company must make in order to recover its investment in 4 years?

Local Co. has sales of $10.9 million and cost of sales of $6.4 million. Its selling,...

Local Co. has sales of $10.9 million and cost of sales of $6.4 million. Its selling, general and administrative expenses are $450,000 and its research and development is $1.5 million. It has annual depreciation charges of $1.3 million and a tax rate of 35%. a. What is Local's gross margin? b. What is Local's operating margin? c. What is Local's net profit margin?

Local Co. has sales of $10.6 million and cost of sales of $5.7 million. Its? selling,...

Local Co. has sales of $10.6 million and cost of sales of $5.7 million. Its? selling, general and administrative expenses are??$520,000 and its research and development is $1.1 million. It has annual depreciation charges of $1.1 million and a tax rate of 35%. a. What is? Local's gross? margin? b. What is? Local's operating? margin? c. What is? Local's net profit? margin? d. If Local Co. had an increase in selling expenses of $320,000?, how would that affect each of...

Q 28 Your company is considering an expansion project that will cost $1.5 million. The project...

Q 28 Your company is considering an expansion project that will cost $1.5 million. The project will generate after-tax cash flows of $175,000 per year for 6 years. Your company is expected to pay an annual dividend in the amount of $2.50 per share next year and the current price of share is $15. The dividend growth rate is 2.5%. The bonds carry an 8 percent coupon, pay interest annually, and mature in 4 years. The bonds are selling at...

Your company is planning to open a new gold mine that will cost $1.45 million to...

Your company is planning to open a new gold mine that will cost $1.45 million to build, with the expenditure occurring at the end of the year two years from today. The mine will bring year-end after-tax cash inflows of $1.09 million at the end of the two succeeding years, and then it will cost $0.61 million to close down the mine at the end of the third year of operation. What is this project’s IRR?

Your company is planning to open a new gold mine that will cost $3 million to...

Your company is planning to open a new gold mine that will cost $3 million to build, with the expenditure occurring at the end of the year three years from today. The mine will bring year-end after-tax cash inflows of $2 million at the end of the two succeeding years, and then it will cost $0.5 million to close down the mine at the end of the third year of operation. What is this project’s IRR? ( give manual answer...

Question