Question: Delta Software is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life, after which

Delta Software is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life, after which it will be worthless, and it will be depreciated by the straight line method over 3 years. Revenues and other operating costs are expected to be constant over the project's 3-year life. What is the project's operating cash flow during Year 1?

Equipment cost (depreciable basis) .... $75,000

Straight line depreciation rate ....... 33.33%

Sales ...............$60,000

Operating costs excl. depreciation ..... $25,000

Tax rate ..............35%

Step by Step Solution

★★★★★

3.44 Rating (176 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Depreciation 75000 x 33333 25000 Particulars Amount Sales 6... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

68-B-M-A-S-C-F (1101).xlsx

300 KBs Excel File

Students Have Also Explored These Related Managerial Accounting Questions!

Fool Proof Software is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life, and the allowed depreciation rates for such property are 33%, 45%,...

Swannee Resorts is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life, would be depreciated by the straight line method over the project's 3...

Temple Corp. is considering a new project whose data are shown below. The equipment that would be used has a three-year tax life, would be depreciated by the straight-line method over its three-year...

Clemson Software is considering a new project whose data are shown below.The required equipment has a 3-year tax life, after which it will be worthless, and it will be depreciated by the...

Kenner Inc. is considering a project that has the following cash flow and WACC data.What is the project's discounted payback period? WACC:10.00% Year 01234 Cash flows-$1900$1050$970$890$810 Your...

Your company, LBNC Inc., is considering a new project whose data are shown below.The required equipment has a 3-year tax life, and the accelerated rates for such property are 33%, 45%, 15%, and 7%...

BUSN 302.01 Fall 2017 Name 1. Fitzgerald Computers is considering a new project whose data are shown below. thieghtcline method over Exam-1 3-year tax life, after which it will be worthless, and it...

Mechanicsville is planning to invest on a new project whose data are shown below. The equipment has a 3-year tax life; depreciation method to be used is the straight-line method over the 3 years....

How large a sample must be taken from a normal pdf where E(Y) = 18 in order to guarantee that has a 90% probability of lying somewhere in the interval [16, 20]? Assume that = 5.0. n =Y, =

The figure shows a semicircle and a rectangle from which a triangle has been cut. Find the area of the figure. Amy is riding a bicycle with tires that have a radius of 2 B cm If the tires have made...

For an investor with a longer investment horizon, the best investment strategy will be to own more stocks than bonds in earlier years. more bonds than stocks in earlier years. only stocks in earlier...

Define and give examples for each of the following terms: maintainability, reliability, availability, equipment efficiency, equipment quality rate.

As of January 1, 2013, Floor Design Inc. had a balance of $9,900 in Cash, $3,500 in Common Stock and $6,400 in Retained Earnings. These were the only accounts with balances in the ledger on January...

On January 1, 2013, the following information was drawn from the accounting records of Craven Company: cash of $800; land of $3,500; notes payable of $1,600; and common stock of $1,000. Required a....

Total stockholders equity of Davis Company increased by $42,250 between December 31, 2013, and December 31, 2014. During 2014 Davis acquired $15,000 cash from the issue of common stock. The company...

step by step result Question 4) The board of a Condo Corporation would like to know the number of times residents use the elevator in a week. There are 400 residents in the building. The management...

An instructor grades on a curve (normal distribution) and your grade for each test is determined by the following where S = your score. A-grade: S + 2 B-grade: + S

1 : Determine the rate (mL/hr) for the following. Order: nitroprusside (Nipride) IV 0.5 mcg/kg/min. Wt. = 125 pounds. Available: nitroprusside ( Nipride) 10 mg in 100 mL D5W. (Record using a whole...