Initial Investment: $1,000,000
WACC: 10%
Revenue: 850,000
COGS: $540,000
Operating Expenses: $50,000
Depreciation Expense: $125,000
Tax Expense: $28,350
What is the cumulative Net Cash Flow for the first year?
Initial Investment: $1,000,000WACC: 10%Revenue: 850,000COGS: $540,000Operating Expenses: $50,000Depreciation Expense: $125,000Tax Expense: $28,350What is the Operational Cash Flow for the first year?
AFTER TAX CASH FLOW
Initial investment in the asset $80,000
Annual revenues $50,000
Annual expenses $20,000
Duration 6 years.
Since the asset was in very good condition, it was sold ate the end
of the 6 th year in $35,000 instead of $20,000.
Calculate the After Tax Cash Flow and After Tax NPV for this
project, using a tax rate of 30%, an after tax MARR of 12% per
year
Year 1 Year 2
Revenues 128.9 151.6
COGS and Operating Expenses (other than depreciation) 49.6
52.7
Depreciation 24.9 43.5
Increase in Net Working Capital 3.4 8.1
Capital Expenditures 27.3 43.2
Marginal Corporate Tax Rate 35% 35%
a. What are the incremental earnings for this project for years
1 and 2? (Note: Assume any incremental cost of goods sold is
included as part of operating expenses.)
b. What are the free cash flows for this project for years 1
and 2?...
Year 1
Year 2
Revenues
120.8
150.6
COGS and Operating Expenses (other than depreciation)
46.1
54.5
Depreciation
24.9
32.9
Increase in Net Working Capital
2.8
8.2
Capital Expenditures
29.2
38.4
Marginal Corporate Tax Rate
35%
35%
a. What are the incremental earnings for this project for years
1 and 2? (Note: Assume any incremental cost of goods sold is
included as part of operating expenses.)
b. What are the free cash flows for this project for years 1
and 2?
Year 1
Year 2
Revenues
126.1126.1
155.6155.6
COGS and Operating Expenses (other than depreciation)
36.236.2
57.157.1
Depreciation
28.128.1
39.139.1
Increase in Net Working Capital
2.32.3
8.68.6
Capital Expenditures
28.528.5
37.637.6
Marginal Corporate Tax Rate
3535%
3535%
a. What are the incremental earnings for this project for years
1 and 2? (Note: Assume any incremental cost of goods sold is
included as part of operating expenses.)
b. What are the free cash flows for this project for years 1
and 2?...
XYZ Inc., has sales of $800,000, costs of $375,000,
depreciation expense of $85,000, interest expense of $50,000, and a
tax rate of 35%. What is the net income of this firm? (10
Points)The income statement for the company is(Use Excel and Excel Formulas to answer)
RipplingBrook Mining Co. had operating cashflow equal to
$50,000. Depreciation expense during the year was $7,500. Interest
expense was $3,000 and the company paid down $3,500 in long term
debt. The company spent $20,000 on new equipment and had an
increase in working capital of $1,000. What was the cash flow to
stockholders?
2. RipplingBrook Mining Co. had operating cashflow equal to
$50,000. Depreciation expense during the year was $7,500. Interest
expense was $3,000 and the company paid down $3,500 in long term
debt. The company spent $20,000 on new equipment and had an
increase in working capital of $1,000. What was the cash flow to
stockholders?