Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. q 19 18. phone home, inc., is considering a new

Q 19 18. Phone Home, Inc., is considering a new three-year expansion...

70.2K

Verified Solution

Question

Finance

image

image

Q 19

18. Phone Home, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $4.2 million. The fixed asset will be depreciated straight-line to zero over its three-year life, after which time it will be worthless. The project is estimated to generate $3,100,000 in annual sales, with costs of $990,000. If the tax rate is 35%, what is the OCF for this project? Sales $ 3,100,000 Costs (990,000) Depreciation (1,400,000) EBIT? Taxes (34%)? Net income? OCF = ? ? ? ? 19. In the previous problem (question 18), suppose the project requires an initial investment in net working capital of $300,000, and the fixed asset will have a market value of $210,000 at the end of the project. What is the project's year 0 net cash flow? Year 12 Year 2? Year 3? What is the new NPV? 0 1 1,861,500 2 1,861,500 Year OCF NWC Net fixed assets Total project CF 3 1,861,500 +300,000 +136,500 -300,000 $4,200,000 -4,500,000 1,861,500 1,861,500 2,298,000

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Hi, can you answer this question in more detail? Subject: Project Management â‘  Consider the criteria for successful...

Operations Management
Q

MOS Capacitor. If i have a MOS capactitor with: tox=0,1 µm, T=300 K, ND= 1015cm-3 ....

Electrical Engineering
Q

Captain Kiddo is trapped into her car, a 1967 DeTomaso Mangusta, windows rolled up, which sinks...

Physics
Q

What does a passing vehicle driver need to watch out for when passing a commercial...

Biology
Q

The radioactive nucleus can decay by two different processes The half life for the first...

Physics
Q

Given f(x)= x-12x+5, find all local maxima and local minima.B) local max:21, local min: -...

Basic Math
Q

For the real-valued functions g(x) = 4x-1 and h(x)=?x+5, find the composition g h and...

Calculus
Q

IF THE EQUATION IS NOT IN SLOPE INTERCEPT FORM THEN PUT IT IN THAT FORM...

Algebra
Q

Menlo Company distributes a single product. The company's sales and expenses for last month follow:...

Accounting
Q

multiple choice 700 Pitt Enterprises manufactures...

Accounting
Q

The following data relates to company X Ltd for 2019 and 2020: ...

Accounting
Q

Sarah has learned a lot from you over the past two months, and has compiled...

Accounting