QUESTION 5 A project will produce an operating cash flow of $293,000 a year for four years The initial cash outlay for equipment will be $815,000 The net aftertax salvage value of $14,800 will be received at the end of the project The project requires 64,000 of net working capital up front that will be fully recovered What is the net present value of the project if the required rate of return is 11 percent $71,075 88 $76,431 84 $81,924 59 $86,207 33 $91,536 10 QUESTION 7 Daktronics, Inc is considering a 3 year project with an initial cost of $594,000 The project will not directly produce any sales but will reduce operating costs by $132,000 a year The equipment is classified as MACRS 7 year property The MACRS table values are 1429, 2449, 1749, 1249, 0893, 0892, 0893, and 0446 for Years 1 to 8, respectively At the end of the project, the equipment will be sold for an estimated $266,500 The tax rate is 25 percent and the required return is 11 percent An extra $27,400 of inventory will be required for the life of the project What is the total cash flow for Year 3 $417,186 70 $484,563 80 $455,629 30 $511,239 56 $540,620 54

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Question: QUESTION 5 A project will produce an operating cash flow of $293,000 a year for four years. The initial cash outlay for equipment will be

QUESTION 5

A project will produce an operating cash flow of $293,000 a year for four years. The initial cash outlay for equipment will be $815,000. The net aftertax salvage value of $14,800 will be received at the end of the project. The project requires 64,000 of net working capital up front that will be fully recovered. What is the net present value of the project if the required rate of return is 11 percent?
$71,075.88
$76,431.84
$81,924.59
$86,207.33
$91,536.10

QUESTION 7

Daktronics, Inc. is considering a 3-year project with an initial cost of $594,000. The project will not directly produce any sales but will reduce operating costs by $132,000 a year. The equipment is classified as MACRS 7-year property. The MACRS table values are .1429, .2449, .1749, .1249, .0893, .0892, .0893, and .0446 for Years 1 to 8, respectively. At the end of the project, the equipment will be sold for an estimated $266,500. The tax rate is 25 percent and the required return is 11 percent. An extra $27,400 of inventory will be required for the life of the project. What is the total cash flow for Year 3?
$417,186.70
$484,563.80
$455,629.30
$511,239.56
$540,620.54

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