As assistant to the CFO of XYZ Inc., you must estimate the Year 1 cash flow for a project with the following data. What is the Year 1 cash flow? Sales Revenue $8,000 Depreciation $3,500 Operating Expenses $4,000 Tax Rate 40%
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As assistant to the CFO of XYZ Inc., you must estimate the Year 1 cash flow for a project with the following data. What is the Year 1 cash flow?
Sales Revenue | $8,000 |
$3,500 | |
Operating Expenses | $4,000 |
Tax Rate | 40% |
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- As assistant to the CFO of Boulder Inc., you must estimate the Year 1 cash flow for a project with the following data. What is the Year 1 cash flow? Do not round the intermediate calculations and round the final answer to the nearest whole number. Sales revenues$11,800Depreciation$4,000Other operating costs$6,000Tax rate35.0% a.$4,756 b.$5,170 c.$6,359 d.$5,377 e.$4,033As assistant to the CFO of Boulder Inc., you must estimate the Year 1 cash flow for a project with the following data. What is the Year 1 cash flow? Do not round the intermediate calculations and round the final answer to the nearest whole number. Sales revenues $11,900 Operating costs $5,430 Tax rate 20.0%As assistant to the CFO of Boulder Inc., you must estimate the Year 1 cash flow for a project with the following data. What is the Year 1 cash flow? Sales revenues $13,000 Depreciation $4,000 Otheroperatingcosts $6,000 Tax rate 35.0%
- As assistant to the CFO of Boulder Inc., you must estimate the Year 1 cash flow for a project with the following data. What is the Year 1 cash flow? Do not round the intermediate calculations and round the final answer to the nearest whole number. Sales revenues $13,100 Depreciation $4,000 Other operating costs $6,000 Tax rate 35.0%In your first job with TBL Inc. your task is to consider a new project whose data are shown below. What is the project's Year 1 cash flow? The annual operating cash flows of the project can be calculated as follows: OCF = {[Sales - Operating Costs]*(1-Tax Rate)} + (Depreciation * Tax Rate) Sales revenues $225,250 Depreciation $78,847 Other operating costs $92,000 Tax rate 18%The Dammon Corp. has the following investment opportunities: Machine A Machine B Machine C ($10,000 cost) ($22,500 cost) ($35,500 cost) Inflows Inflows Inflows year 1 $6,000 year 1 $12,000 year 1 $-0- year 2 year 3 3,000 year 3 3,000 year 2 7,500 1,500 year 3 1,500 year 4 20,000 year 2 30, 000 5,000 year 4 -0- year 4 Under the payback method and assuming these machines are mutually exclusive, which machine(s) would Dammon Corp. choose? Multiple Choice Machine C Machine B Machine A
- The Dammon Corp. has the following investment opportunities: Machine A Machine B Machine C ($10,000 cost) ($22,500 cost) ($35,500 cost) Inflows Inflows Inflows year 1 $ 6,000 year 1 $ 12,000 year 1 $ -0- year 2 3,000 year 2 7,500 year 2 30,000 year 3 3,000 year 3 1,500 year 3 5,000 year 4 -0- year 4 1,500 year 4 20,000 Under the payback method and assuming these machines are mutually exclusive, which machine(s) would Dammon Corp. choose?A company is considering a project that has the following cash flow data. What is the project's payback? * Year 1 2 3 Cash flowS -$750 $300 $325 $350PROBLEM # 2 Consider the following cash flow of a company: Year Cash flow -600 10 -5000 11-40 1000 a) Compute the IRR for this table b) At MARR 15% determine the acceptability of each project.
- An interior design studio is trying to choose between the following two mutually exclusive design projects: Year 0 1 2 3 Cash Flow Cash Flow (0) -$64,000 31,000 31,000 31,000 a-1 If the required return is 10 percent, what is the profitability index for both projects? (Round your answers to 3 decimal places. (e.g., 32.161)) Project I Project II -$18,000 9,700 9,700 9,700 Profitability Index a-2 If the company applies the profitability index decision rule, which project should the firm accept? O Project I O Project II Project I Project II b-1 What is the NPV for both projects? (Round your answers to 2 decimal places. (e.g., 32.16)) O Project I Project II NPV b-2lf the company applies the NPV decision rule, which project should it take?McGloire Construction is analyzing its capital expenditure proposals for thepurchase of equipment in the coming year. The capital budget is limited to $5,000,000 for theyear. Lori Alleyne, staff analyst at McGloire’s, is preparing an analysis of the three projectsunder consideration by Joyanne McGloire, the company’s owner. A B C D 1 Project A Project B Project C 2 Projected cash outflow 3 Net initial investment $3 000 000 $1 500 000 $4 000 000 4 5 Projected cash inflows 6 Year 1 $1 000 000 $400 000 $2 000 000 7 Year 2 1 000 000 900 000 2 000 000 8 Year 3 1 000 000 800 000 200 000 9 Year 4 1 000 000 100 000 10 11 Required rate of return 10% 10% 10% 1. Because the company’s cash is limited, McGloire thinks the payback methodshould be used to choose between the capital budgeting projects.a. List two benefits and two limitations of using the payback method to choosebetween projects? b. Calculate the payback…1. A manufacturing company wants to expand its product line. There are two investment projects which could help the company achieve its aim. The data for each investment project is shown below. Data for the investment projects A and B Project A Year Initial investment outlay Cash inflows Personnel expenses Material expenses Maintenance expenses 0. 1 3 125,000 75,000 22,500 15,000 2,500 3,750 80,000 22,500 20,000 2,500 3,750 95,000 22,500 22,500 5,000 3,750 95,000 22,500 22,500 8,750 5,000 86,250 22,500 22,500 10,000 5,625 12,500 Other cash outflows Liquidation value Project B Year Initial investment outlay Cash inflows Personnel expenses Material expenses Maintenance expenses 2. 3. 4 225,000 155,000 140,000 27,500 27,500 22,500 25,000 8,750 11,250 108,750 93,750 27,500 27,500 22,500 22,500 15,000 17,500 3,750 3,750 125,000 27,500 24,000 14,000 4,000 15,000 Other cash outflows 6,250 3,750 Liquidation value The Discount Rate is 8% a. Assess the relative profitability of the two options…