1. ABC, Inc is planning the purchase of new equipment that costs $102336. The project is expected to last for 5 years. Each year, the new project is expected to sell 108 units for $463 per unit. The variable costs are expected to $70 per unit and the fixed costs are expected to be $13828. The equipment will be depreciated on a straight-line basis over the 5-year life of the project. That is, the depreciation each year will be $102336/5. Assuming a tax rate of 37%, what is the operating cash flow?

2. ABC Company purchased $50484 of equipment 5 years ago. The equipment is 7-year MACRS property. The firm is selling this equipment today for $8128. What is the After-tax Salvage Value if the tax rate is 35 percent? The MACRS allowance percentages are as follows, commencing with year one: 14.29, 24.49, 17.49, 12.49, 8.93, 8.92, 8.93, and 4.46percent.

3. A project requires $471428 of equipment that is classified as 7-year property.What is the depreciation expense in Year 5 given the following MACRS depreciation allowances, starting with year one: 14.29, 24.49, 17.49, 12.49, 8.93,8.92, 8.93, and 4.46 percent?

4. A project requires $256625 of equipment that is classified as 7-year property. What is the book value of this asset at the end of year 3 given the following MACRS depreciation allowances, starting with year one: 14.29, 24.49, 17.49, 12.49, 8.93, 8.92, 8.93, and 4.46 percent?

ABC, Inc purchased some new machinery three years ago for $284753. Today, it is selling this machinery for $55043. What is the After-tax Salvage Value of the new machinery? Assume that the tax rate is 36%.

The MACRS allowance percentages are as follows, starting with Year 1: 20.00, 32.00,19.20, 11.52, 11.52, and 5.76 percent.

5 ABC, Inc is planning the purchase of a new equipment which will cost $26526. The project is expected to last for 7 years. The equipment will have a book value of $3629 at the end of Year 7. The increase in net working capital is expected to be $3061, all of which will be recouped at the end of the project. The project is expected to have annual operating cash flows of $10291. What is the Total Cash Flow in Year 7 of the project if the equipment can be sold for $6185 and the tax rate is 37%?

Note: In the last year of the project, the Total Cash Flow = Operating Cash Flow + Terminal Cash Flow

6 ABC, Inc. is considering purchase of a new equipment. The sales are expected to be $816446 and the total cash expenses are expected to be $393782. The annual depreciation is $60655 and the tax rate is 25.6%. What is the operating cash flow?

7 ABC, Inc., is considering purchase of a new equipment. The expected sales are expected to be $5513676. The annual cash operating expenses are expected to be $2801184. The annual depreciation is estimated to be $798729 and the interest expense is estimated to be $212677. If the tax rate is 27%, what is the operating cash flow?

8. ABC, Inc is considering the purchase of a new equipment. The equipment costs $16576 and an additional $573 is needed to install it. The project will also require an initial $6122 investment in net working capital. The equipment will be depreciated straight-line to zero over a five-year life. What is the project's initial investment outlay?

9 ABC Company purchased $94118 of equipment 4 years ago. The equipment is 7-year MACRS property. The firm is selling this equipment today for $5129. What is the After-tax Salvage Value if the tax rate is 15%?

The MACRS allowance percentages are as follows, commencing with year one: 14.29, 24.49, 17.49, 12.49, 8.93, 8.92, 8.93, and 4.46 percent.

Answer rating: 100% (QA)

1 The operating cash flow for the new project is 102336 70 x 108 units 13828 58432 This means that t... View the full answer