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  3. calculate the firms operating cash flows for each

Calculate the firms operating cash flows for each of the 6 years using the equation:...

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Finance

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  1. Calculate the firms operating cash flows for each of the 6 years using the equation: OCF = [EBIT x (1 T)] + Depreciation
  2. Whats the formula about depreciation
L A B D E F G . K lo #Cost = asset cost + installation cost 11 A firm expects to have earnings before interest and taxes (EBIT) of $145,000 in each of the next 6 years. 12 It pays annual interest of $15,000. The firm is considering the purchase of an asset that costs $125,000, requires 13 $15,000 in installation cost, and has a recovery period of 6 years. It will be the firm's only asset, and the asset's 14 depreciation is already reflected in its EBIT estimates. 15 16 17 18 Year EBIT NOPAT Depreciaton Operating Cash Flow 19 1) 2)=1)*(1-0.4) 3) (4) = (2) + (3 20 1 145000 87000 21 2 145000 87000 22 3 145000 87000 23 4 145000 87000 4 5 145000 87000 25 6 145000 87000 26

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