A proposed three-year project will require $627,000 for fixed assets, $196,000 for inventory, and $34,000 for accounts
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A proposed three-year project will require $627,000 for fixed assets, $196,000 for inventory, and $34,000 for accounts receivable. Accounts payable are expected to increase by $156,000. The fixed assets will be depreciated straight-line to a zero book value over five years. At the end of the project, the fixed assets can be sold for $225,000. The net working capital returns to its original level at the end of the project. The operating cash flow per year is $62,000. The tax rate is 35 percent and the discount rate is 12 percent.
What is the total cash flow in the final year of the project?
Related Book For
Corporate Finance A Focused Approach
ISBN: 978-1305637108
6th edition
Authors: Michael C. Ehrhardt, Eugene F. Brigham
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