Given is the following information for EA GAMES and a new Project called HeavenGames. ...
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Accounting
Given is the following information for EA GAMES and a new Project called HeavenGames.
NEW PROJECT HeavenGames
The initial investment in a new plant will cost $1 million to build and these costs will be depreciated straight line to 0 at the end of the project, year 3, and the plant will be sold for $250,000.
It currently already owns the land where EA GAMES want to build the new plant, and it is currently valued at $250,000. The original price that the land was bought for equaled $150,000, 5 years ago, and the land can be sold for $300,000 at the end of the project.
The company expects to sell 50,000 items at a price of $59. The fixed costs are $110,000 and the variable cost per unit is $19.
The investment in NWC at the start of the project amounts to $50,000 and will be recouped at the end of the project. The tax rate is 35%.
What is the project cash flow for Year 0?
What is the annual operating cash flow from this project?
What is the After Tax Salvage Value of the manufacturing plant?
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