Question
In: Finance
ool Proof Software is considering a new project whose data are shown below. The equipment that...
ool Proof Software is considering a new project whose data are shown below. The equipment that will be used has a 3-year class life and will be depreciated by the MACRS depreciation system. Revenues and Cash operating costs are expected to be constant over the project's 10-year life. What is the Year 1 after-tax net operating cash flow? Enter your answer rounded to two decimal places. Do not enter $ or comma in the answer box. For example, if your answer is $12,300.456 then enter as 12300.46 in the answer box. Equipment cost (depreciable basis) $85,000 Sales revenues, each year $80,000 Cash operating costs $29,000 Tax rate 25.0%
Solutions
jeff jeffy answered 1 year agoRelated Solutions
Creative Software Corporation is considering a new project whose data are shown below. The required equipment...
Creative Software Corporation is considering a new project whose
data are shown below. The required equipment has a 3-year tax life,
after which it will be worthless, and it will be depreciated by
MACRS over 3 years. Revenues and other operating costs are expected
to be constant over the project’s 3-year life. What is the
project’s IRR and NPV? Briefly discuss your results. Equipment cost
$65,000 Sales Revenue each year $60,000 Operating Costs $25,000
Salvage Value $15,000 Tax Rate 35%
Creative Software Corporation is considering a new project whose data are shown below. The required equipment...
Creative Software Corporation is considering a new project whose
data are shown below. The required equipment has a 3-year tax life,
after which it will be worthless, and it will be depreciated by
MACRS over 3 years. Revenues and other operating costs are expected
to be constant over the project’s 3-year life. What is the
project’s NPV? Briefly discuss your results.
Equipment cost $65,000
Sales Revenue each year $60,000
Operating
Costs
$25,000
Salvage
Value
$15,000
Tax
Rate
35%
Clemson Software is considering a new project whose data are shown below. The required equipment has...
Clemson Software is considering a new project whose data are
shown below. The required equipment has a 3-year tax life, after
which it will be worthless, and it will be depreciated by the
straight-line method over 3 years. Revenues and other operating
costs are expected to be constant over the project's 3-year life.
What is the project's Year 1 cash flow? Do not round the
intermediate calculations and round the final answer to the nearest
whole number. Equipment cost (depreciable...
Creative Software Corporation is considering a new project whose data are shown below. The required equipment...
Creative Software Corporation is considering a new project whose
data are shown below. The required equipment has a 3-year tax life,
after which it will be worthless, and it will be depreciated by
MACRS over 3 years. Revenues and other operating costs are expected
to be constant over the project’s 3-year life. The WACC is 8%. What
is the project’s NPV? Briefly discuss your results.
Equipment cost $65,000
Sales Revenue each year $60,000
Operating
Costs
$25,000
Salvage
Value
$15,000
Tax...
Clemson Software is considering a new project whose data are shown below. The required equipment has...
Clemson Software is considering a new project whose data are
shown below. The required equipment has a 3-year tax life and will
be depreciated by the straight-line method over 3 years. Revenues
and other operating costs are expected to be constant over the
project's 3-year life. What is the project's Year 1 cash flow?
Equipment cost (depreciable basis) $65,000
Increase in inventory $5,000
Straight-line depreciation rate 33.333% ($21,667 per year)
Sales revenues, each year $60,000
Operating costs (excl. depreciation) $25,000...
Cookie Cutter Corp. is considering a new project whose data are shown below. The equipment that...
Cookie Cutter Corp. is considering a new project whose data are
shown below. The equipment that would be used has a 5-year tax
life, would be depreciated by the straight-line method over its
5-year life, and would have a zero salvage value. No change in net
operating working capital would be required. Revenues and other
operating costs are expected to be constant over the project's
5-year life. What is the project's NPV? Do not
round the intermediate calculations and round...
Cookie Cutter Corp. is considering a new project whose data are shown below. The equipment that...
Cookie Cutter Corp. is considering a new project whose data are
shown below. The equipment that would be used has a 5-year tax
life, would be depreciated by the straight-line method over its
5-year life, and would have a zero salvage value. No change in net
operating working capital would be required. Revenues and other
operating costs are expected to be constant over the project's
5-year life. What is the project's NPV? Do not
round the intermediate calculations and round...
Cookie Cutter Corp. is considering a new project whose data are shown below. The equipment that...
Cookie Cutter Corp. is considering a new project whose data are
shown below. The equipment that would be used has a 5-year tax
life, would be depreciated by the straight-line method over its
5-year life, and would have a zero salvage value. No change in net
operating working capital would be required. Revenues and other
operating costs are expected to be constant over the project's
5-year life. What is the project's NPV? Do not
round the intermediate calculations and round...
Cookie Cutter Corp. is considering a new project whose data are shown below. The equipment that...
Cookie Cutter Corp. is considering a new project whose data are
shown below. The equipment that would be used has a 5-year tax
life, would be depreciated by the straight-line method over its
5-year life, and would have a zero salvage value. No change in net
operating working capital would be required. Revenues and other
operating costs are expected to be constant over the project's
5-year life. What is the project's NPV? Do not
round the intermediate calculations and round...
Cookie Cutter Corp. is considering a new project whose data are shown below. The equipment that...
Cookie Cutter Corp. is considering a new project whose data are
shown below. The equipment that would be used has a 5-year tax
life, would be depreciated by the straight-line method over its
5-year life, and would have a zero salvage value. No change in net
operating working capital would be required. Revenues and other
operating costs are expected to be constant over the project's
5-year life. What is the project's IRR? Do not
round the intermediate calculations. State in...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- The steam used during the production of alumina in the Bayer process serves as both a...
- you just received an inheritance and are trying to decide between 3 options. your required return...
- Suppose you work in public relations for a company that is developing an attractive, affordable, low-emissions...
- Preston Company manufactures car seats in its San Antonio plant. Each car seat passes through the...
- TOPIC: EMPLOYEE HEALTH AND SAFETY IN THE ORGANIZATION Organization officials have a legal and moral responsibility...
- Broussard Skateboard's sales are expected to increase by 15% from $8.8 million in 2016 to $10.12...
- Prompt: Discuss the Ethical Dilemma in Chapter 9 with James 2:1-8 as the basis for your...
ADVERTISEMENT