Question: Need help with finding Operating Cash Flows. Only solve for OCF, the question is in the attachment. Question 2 Kolby's Korndogs is looking at a

Need help with finding Operating Cash Flows. Only solve for OCF, the question is in the attachment.

Question 2 Kolby's Korndogs is looking at a new sausage system with an installed cost of $645,000. This cost will be depreciated straight-line to zero over the project's five-year life, at the end of which the sausage system can be scrapped for $103,000. The sausage system will save the firm $191,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $49,000. Required: What is the aftertax salvage value of the equipment? (Do not round intermediate calculations. Round your answer to the nearest whole number (e.g., 32).) Aftertax salvage value $ 67,980 What is the annual operating cash flow? (Do not round intermediate calculations. Round your answer to the nearest whole number (e.g., 32).) OCF $ 149,173 If the tax rate is 34 percent and the discount rate is 8 percent, what is the NPV of this project? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) NPV $ 64,055.91
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
