Question
In: Finance
KADS, Inc. has spent $360,000 on research to develop a new computer game. The firm is...
KADS, Inc. has spent $360,000 on research to develop a new computer game. The firm is planning to spend $160,000 on a machine to produce the new game. Shipping and installation costs of the machine will be capitalized and depreciated; they total $46,000. The machine has an expected life of three years, a $71,000 estimated resale value, and falls under the MACRS seven-year class life. Revenue from the new game is expected to be $560,000 per year, with costs of $210,000 per year. The firm has a tax rate of 21 percent, an opportunity cost of capital of 13 percent, and it expects net working capital to increase by $80,000 at the beginning of the project. What will the cash flows for this project be?
Solutions
jeff jeffy answered 1 year agoRelated Solutions
KADS, Inc. has spent $380,000 on research to develop a new computer game. The firm is...
KADS, Inc. has spent $380,000 on research to develop a new
computer game. The firm is planning to spend $180,000 on a machine
to produce the new game. Shipping and installation costs of the
machine will be capitalized and depreciated; they total $48,000.
The machine has an expected life of three years, a $73,000
estimated resale value, and falls under the MACRS seven-year class
life. Revenue from the new game is expected to be $580,000 per
year, with costs of...
KADS, Inc. has spent $400,000 on research to develop a new computer game. The firm is...
KADS, Inc. has spent $400,000 on research to develop a new
computer game. The firm is planning to spend $200,000 on a machine
to produce the new game. Shipping and installation costs of the
machine will be capitalized and depreciated using bonus
depreciation; they total $50,000. The machine has an expected life
of three years and a $75,000 estimated resale value. Revenue from
the new game is expected to be $600,000 per year, with fixed costs
of $250,000 per year....
KADS, Inc. has spent $490,000 on research to develop a new computer game. The firm is...
KADS, Inc. has spent $490,000 on research to develop a new
computer game. The firm is planning to spend $290,000 on a machine
to produce the new game. Shipping and installation costs of the
machine will be capitalized and depreciated; they total $59,000.
The machine has an expected life of three years, a $84,000
estimated resale value, and falls under the MACRS 7-year class
life. Revenue from the new game is expected to be $690,000 per
year, with costs of...
KADS, Inc., has spent $400,000 on research to develop a new computer game. The firm is...
KADS, Inc., has spent $400,000 on research to develop a new
computer game. The firm is planning to spend $200,000 on a machine
to produce the new game. Shipping and installation costs of the
machine will be capitalized and depreciated; they total $50,000.
The machine has an expected life of three years, a $75,000
estimated resale value, and falls under the MACRS 7-year class
life. Revenue from the new game is expected to be $600,000 per
year, with costs of...
KADS, Inc. has spent RM300,000 on research to develop a new computer game. The firm is...
KADS, Inc. has spent RM300,000 on research to develop
a new computer game. The firm is planning to spend RM250,000 on a
machine to produce the new game.
Shipping and installation costs of the machine will be capitalized
and depreciated; they total RM50,000.
The machine has an expected life of 3 years, a RM175,000 estimated
resale value, and depreciation is estimated at RM35,725 for 1st
year, RM61,225 for 2nd year and RM43,725 for 3rd year.
Revenue from the new game...
Apricot, Inc. has spent $400,000 on research to develop a new computer game. The firm is...
Apricot, Inc. has spent $400,000 on research to develop a new
computer game. The firm is planning to spend $200,000 on a machine
to produce the new game. Shipping and installation costs of the
machine will be capitalized and depreciated; they total $50,000.
The machine has an expected life of 3 years, a $75,000 estimated
resale value, and falls under the MACRS 7-Year class life. Revenue
from the new game is expected to be $600,000 per year, with costs
of...
Your company has spent $250,000 on research to develop a new computer game. The firm is...
Your company has spent $250,000 on research to develop a new
computer game. The firm is planning to spend $1,400,000 on a
machine to produce the new game. Shipping and installation costs
for the new machine total $200,000 and these costs will be
capitalized and depreciated together with the cost of the machine.
The machine will be used for 3 years, has a $200,000 estimated
resale value at the end of three years, and will be depreciated
straight line over...
Your company has spent $180,000 on research to develop a new computer game. The firm is...
Your company has spent $180,000 on research to develop a new
computer game. The firm is planning to spend $40,000 on a machine
to produce the new game. Shipping and installation costs of $5,000
for the machine will be capitalized and depreciated. The machine
has an expected life of five years, a $25,000 estimated resale
value, and falls under the MACRS five-year class life. Revenue from
the new game is expected to be $200,000 per year, with costs of
$100,000...
ABC Computer, Inc. wants to develop and sell a new kind of computer. This new computer...
ABC Computer, Inc. wants to develop and sell a new kind of
computer. This new computer is estimated to have a customer selling
price of $24,600. ABC thinks they can find customers to buy 1,630
per year of this new computer. ABC now sells 1,980 units of its
current computer model per year. If the new computer is introduced,
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costs...
ABC Computer, Inc. wants to develop and sell a new kind of computer. This new computer...
ABC Computer, Inc. wants to develop and sell a new kind of
computer. This new computer is estimated to have a customer selling
price of $24,900. ABC thinks they can find customers to buy 1,660
per year of this new computer. ABC now sells 2,010 units of its
current computer model per year. If the new computer is introduced,
sales of the current computer model will decline to 1,680 units
annually. The current computer model sells for $23,300. Variable
costs...
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