Question: A capital project will require a firm to spend $393,000 purchase and install new equipment, which will be depreciated on a straight line basis

A capital project will require a firm to spend $393,000 purchase and

 install new equipment, which will be depreciated on a straight line basis over its 3-year life to a value of $0. The company will

A capital project will require a firm to spend $393,000 purchase and install new equipment, which will be depreciated on a straight line basis over its 3-year life to a value of $0. The company will also experience and immediate increase in net working capital of $90,000. The project is expected to generate annual sales of $201,000, and incur costs of goods sold and other operating expenses of $165,000 per year. The company's marginal tax rate is 23%. What is the annual operating cash flow for this project? (Round your answer to the nearest whole dollar. Do not enter the dollar symbol or any commas. For example, if your answer is $1,234.56789, enter 1235. Do not worry if Canvas adds commas or truncates trailing zeros.) A capital project requires an initial investment of $86,000. It will generate after-tax operating cash inflows of $57,000 per year for each of the next 6 years. In addition, it will experience an after-tax terminal cash inflow of $58,000 at the end of the 6th year. The required rate of return is 12%. What is Net Present Value (NPV) of the project? (Round your answer to the nearest whole dollar. Do not enter the dollar symbol or any commas. For example, if your answer is $1,234.56789, enter 1235. Do not worry if Canvas adds commas.) An investor purchased 100 shares of stock on January 1 for $26.52 per share. The company paid a dividend of $1.10 per share at the end of each of the 4 quarters of the year. On December 31, the stock closed at $34.80 per share. The investor still owns the stock. What was the investor's dividend yield for the year? (Round your answer to the nearest one-hundredth of a percent. Do not enter the percentage symbol. For example, if your answer is 12.3456789%, enter 12.35. Da not worry if Canvas truncates trailing zeros.)

Step by Step Solution

3.52 Rating (169 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

A To calculate the annual operating cash flow for this project you can use the following formula Operating Cash Flow Annual Sales Cost of Goods Sold O... View full answer

blur-text-image
Question Has Been Solved by an Expert!

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

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Corporate Finance Questions!