Johnson Communications is trying to estimate the Year 1 operating cash flow for a proposed project. The
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Johnson Communications is trying to estimate the Year 1 operating cash flow for a proposed project. The assets required for the project were fully depreciated at the time of purchase. The financial staff has collected the following information: Sales revenues $8.1 million Operating costs 4.5 million Interest expense 1.9 million Johnson has also determined that this project would cannibalize one of its other projects by $1.5 million of cash flow (before taxes) per year. The firm has a 30 percent tax rate, and its WACC is 12 percent. Calculate the project’s operating cash flow for Year 1.
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Related Book For
Linear Algebra And Its Applications
ISBN: 9781292351216
6th Global Edition
Authors: David Lay, Steven Lay, Judi McDonald
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