Cost of new machine $850,000. Shipping & installation will be $50,000. $300,000 in net working capital...
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Cost of new machine $850,000. Shipping & installation will be $50,000. $300,000 in net working capital required. Simplified using straight method with zero salvage value Annual fixed cost by $800,000. Operating or variable costs is $85 per unit production. Expected sales 1000 unit per year for 10 years at selling price $250 per unit. Cost of capital = 8%, marginal tax rate = 34%. Question: Calculate the initial outlay for this project. Culculate annual after-tax cash flows associated with this project for year 1 through 9, and the terminal cash flow in year 10. Cost of new machine $850,000. Shipping & installation will be $50,000. $300,000 in net working capital required. Simplified using straight method with zero salvage value Annual fixed cost by $800,000. Operating or variable costs is $85 per unit production. Expected sales 1000 unit per year for 10 years at selling price $250 per unit. Cost of capital = 8%, marginal tax rate = 34%. Question: Calculate the initial outlay for this project. Culculate annual after-tax cash flows associated with this project for year 1 through 9, and the terminal cash flow in year 10.
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To calculate the initial outlay for this project we need to consider the following costs 1 Cost of the new machine 850000 2 Shipping and installation ... View the full answer
Related Book For
Financial Management Principles and Applications
ISBN: 978-0133423822
12th edition
Authors: Sheridan Titman, Arthur Keown, John Martin
Posted Date:
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