Question: need help solving!! Operating cash inflows A frm is considering renewing its equipnent to neet increased demand for its peoduct The cost of equipment mod6cations
Operating cash inflows A frm is considering renewing its equipnent to neet increased demand for its peoduct The cost of equipment mod6cations is 51.83 millon plus 5112.000 : in installation costs. The firm wil depreciate the equipment modifications under MACRS, using a 5 -year recovery period (see tablo Iff) Additional sales revenua from the renesal. should amount lo $1.21 mallion per year, and addtional operating expenses and other costs (excluding depreciation and ireeresi) will amount to 35 S. of the addfional sales . The fim is sublect 10 a tax rate of 40%. (Nole. Answer the following questions for each of the next 6 rears) a. What incremental eamings belore depreciation, interest, and taxes will result from the renewal? b. What incremental net operating profits aher taxes will result from the senewal? c. What incremental operating cash inflows wil resull from the renewal? a. The incrementwi probis belore depreciation and tax are ? (Rewnd to the nearest dollar) b. Calculate the incremental net operating profits ahlec taues below. (Round to the nearest dellar) Operating cash inflows A frm is considering renewing its equipnent to neet increased demand for its peoduct The cost of equipment mod6cations is 51.83 millon plus 5112.000 : in installation costs. The firm wil depreciate the equipment modifications under MACRS, using a 5 -year recovery period (see tablo Iff) Additional sales revenua from the renesal. should amount lo $1.21 mallion per year, and addtional operating expenses and other costs (excluding depreciation and ireeresi) will amount to 35 S. of the addfional sales . The fim is sublect 10 a tax rate of 40%. (Nole. Answer the following questions for each of the next 6 rears) a. What incremental eamings belore depreciation, interest, and taxes will result from the renewal? b. What incremental net operating profits aher taxes will result from the senewal? c. What incremental operating cash inflows wil resull from the renewal? a. The incrementwi probis belore depreciation and tax are ? (Rewnd to the nearest dollar) b. Calculate the incremental net operating profits ahlec taues below. (Round to the nearest dellar)
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