Question: 1.Wright Communications is trying to estimate the first-year operating cash flow for a proposed project. The financial staff has collected the following information: Financial Item:
1.Wright Communications is trying to estimate the first-year operating cash flow for a proposed project. The financial staff has collected the following information:
| Financial Item: | |
|---|---|
| Projected Sales | $20.09 million |
| Expenses | $18.00 million |
| Depreciation | $6.00 million |
| Interest Expense | $2.00 million |
The company faces a 40.00 percent tax rate. What is the projects operating cash flow for year 1? (answer in units of millions)
Answer Format: Currency: Round to: 2 decimal places.
2.Daily Enterprises is purchasing a $10.59 million machine. It will cost $54,433.00 to transport and install the machine. The machine has a depreciable life of five years using the straight-line depreciation and will have no salvage value. The machine will generate incremental revenues of $4.52 million per year along with incremental costs of $1.37 million per year. Dailys marginal tax rate is 38.00%.
The cost of capital for the firm is 13.00%.
(answer in dollars..so convert millions to dollars)
What is the year 0 cash flow for the project?
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