Question: I need help on the above problem. I don't understand where the -$47,600, 92,400 are coming from, and why it is a negative 475,000 at

I need help on the above problem. I don't understand where

I need help on the above problem. I don't understand where the -$47,600, 92,400 are coming from, and why it is a negative 475,000 at the bottom. If someone oculd explain how to get these numbers and why, that would be awesome.

It would be much appreciated!

Example: calculating APV with tax benefits to debt Project: Initial investment $475,000, Tc-34%, ro-20% Expected annual sales Expected annual cash costs Operating income $500,000 $360,000 $140,000 If firm and project are Equity financed then: Annual corporate taxes Unlevered cash flow (UCF) -$47,600 $92,400 NPV assuming no leverage is: 475,000(92,400/.20)S13,000 Project would be rejected by an all equity firm

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock 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 Finance Questions!

In the GMP partnership (to which Elan seeks admittance), the capital balances of Mary, Gene, and Pat, who share income in the ratio of 6:3:1, are Mary $ 240,000 Gene 120,000 Pat 40,000 Required: a....

Which business analytics model(s) is used? Briefly justify why this paper's analysis should be considered as the business analytics model(s) you have selected. Provide as much information as you can...

if some one would be able to help me describe Hisco's company using the Strengths, Weaknesses, Opportunities, and Threats (SWOT Analysis) based on the information provided. Also,what the best...

if some one would be able to help me describe Hisco's company using the Strengths, Weaknesses, Opportunities, and Threats (SWOT Analysis) based on the in photos attached. Also, what the best strategy...

Need assistance in describing Hisco's company using the Strengths, Weaknesses, Opportunities, and Threats (SWOT Analysis) based on the information I attached. Also, what would be the best strategy...

Q1-Explain how the EBIT Chart works (inputs determining the outputs-the two lines on the chart Case Leahy Bread Company (LBC) in Cohen Finance Workbook, page 111( a 'caselette') SEE THE IS/BS MODEL &...

Need assistance in describing Hisco's company using the (SWOT Analysis) Strengths- Weaknesses- Opportunities- Threats Also, what would be the best strategy would will be for the next two to three...

Please help with answering the following questions based on the completed budget below. Issues and Problem Areas: Summarize the key weaknesses in the proposed budget, given the established pricing,...

Please quality check my solutions for this advanced heat transfer problem. Show all work. Thank you. All original documents are located at the bottom. 3.9 COMPACT HEAT EXCHANGERS 3.9.10-1 3.9.10...

Can someone please guide me through the last question titled Exercise 2 going for 2 where you have to use the AND OR and ABS formulas I can't wrap my head around doing it. MIS 204 - Lab 3 This lab...

TeleTech Corporation, 2005 1. How does the choice of constant vs. risk-adjusted hurdle rates affect the evaluation of Tele-Techs two segments? What are the implications for Tele-Techs resource...

In January 2014, Imperial Corporation was organized and authorized to issue 4,000,000 shares of no-par common stock and 100,000 shares of 5 percent, $50 par value, noncumulative preferred stock. The...

Trilby Inc. (Trilby) uses the percentage-of-credit-sales method for estimating its bad debt expense. The percentage that Trilby uses is based on historical information. Trilby's management hasn't...

5 When you read a story from a culture different to your own, your thoughts and feelings about it may vary. In pairs, discuss how you react to the ideas in 'Grandmother's Song'. This is a complex...

Draw a class diagram and its relationship based on the following statements. You can use any UML tool/software to represent your class diagram. Do NOT copy and paste your diagram, use the attachment...