Fairfax Pizza is evaluating a project that would require an initial investment in equipment of 100,000...
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Fairfax Pizza is evaluating a project that would require an initial investment in equipment of 100,000 dollars and that is expected to last for 7 years. MACRS depreciation would be used where the depreciation rates in years 1, 2, 3, and 4 are 44 percent, 34 percent, 16 percent, and 6 percent, respectively. For each year of the project, Fairfax Pizza expects relevant, incremental annual revenue associated with the project to be 155,000 dollars and relevant, incremental annual costs associated with the project to be 141.000 dollars. The tax rate is 50 percent. What is (X plus Y) if X is the relevant operating cash flow (OCF) associated with the project expected in year 1 of the project and Y is the relevant OCF associated with the project expected in year 4 of the project? Number Based on the following information, what is the relevant operating cash flow (OCF) associated with the project expected to be in year 2? The project would require an initial investment in equipment of 970,000 dollars that would be depreciated using MACRS where the depreciation rates in years 1, 2, 3, and 4 are 40 percent, 25 percent, 25 percent, and 10 percent, respectively. At the end of the project in 2 years, the equipment would be sold for an expected after-tax cash flow of 11,800 dollars. In year 2 of the project, relevant revenue associated with the project would be 321,600 dollars and relevant costs associated with the project would be 296,100 dollars. The tax rate is 15 percent. Number Fairfax Paint operates stores in Virginia. The firm is evaluating the Vienna project, which would involve opening a new store in Vienna. During year 1, Fairfax Paint would have total revenue of 394,000 dollars and total costs of 275,000 dollars it it pursues the Vienna project, and the firm would have total revenue of 327,000 dollars and total costs of 247,000 if it does not pursue the Vienna project. Depreciation taken by the firm would be 52.000 dollars if the firm pursues the project and 25,000 dollars if the firm does not pursue the project. The tax rate is 15 percent. What is the relevant operating cash flow (OCF) for year 1 of the Vienna project that Fairfax Paint should use in its NPV analysis of the Vienna project? Number Fairfax Pizza is evaluating a project that would require an initial investment in equipment of 100,000 dollars and that is expected to last for 7 years. MACRS depreciation would be used where the depreciation rates in years 1, 2, 3, and 4 are 44 percent, 34 percent, 16 percent, and 6 percent, respectively. For each year of the project, Fairfax Pizza expects relevant, incremental annual revenue associated with the project to be 155,000 dollars and relevant, incremental annual costs associated with the project to be 141.000 dollars. The tax rate is 50 percent. What is (X plus Y) if X is the relevant operating cash flow (OCF) associated with the project expected in year 1 of the project and Y is the relevant OCF associated with the project expected in year 4 of the project? Number Based on the following information, what is the relevant operating cash flow (OCF) associated with the project expected to be in year 2? The project would require an initial investment in equipment of 970,000 dollars that would be depreciated using MACRS where the depreciation rates in years 1, 2, 3, and 4 are 40 percent, 25 percent, 25 percent, and 10 percent, respectively. At the end of the project in 2 years, the equipment would be sold for an expected after-tax cash flow of 11,800 dollars. In year 2 of the project, relevant revenue associated with the project would be 321,600 dollars and relevant costs associated with the project would be 296,100 dollars. The tax rate is 15 percent. Number Fairfax Paint operates stores in Virginia. The firm is evaluating the Vienna project, which would involve opening a new store in Vienna. During year 1, Fairfax Paint would have total revenue of 394,000 dollars and total costs of 275,000 dollars it it pursues the Vienna project, and the firm would have total revenue of 327,000 dollars and total costs of 247,000 if it does not pursue the Vienna project. Depreciation taken by the firm would be 52.000 dollars if the firm pursues the project and 25,000 dollars if the firm does not pursue the project. The tax rate is 15 percent. What is the relevant operating cash flow (OCF) for year 1 of the Vienna project that Fairfax Paint should use in its NPV analysis of the Vienna project? Number
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Answer rating: 100% (QA)
ANSWER OCF XY 2900010500 39500 Year 1 Revenue Less Costs Depreciation 100000 43 Profi... View the full answer
Related Book For
Principles of Corporate Finance
ISBN: 978-1259144387
12th edition
Authors: Richard Brealey, Stewart Myers, Franklin Allen
Posted Date:
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