The information below illustrates data regarding a capital investment project: Initial investment of $825,000 .Installation costs...

 

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The information below illustrates data regarding a capital investment project: Initial investment of $825,000 .Installation costs of 75,000 • Completed market viability study costing $50,000 · EBIT in year 1 of $100,000, growing at 8% per year for 4 years Straight-line depreciation of $162,500 annually Tax rate of 20% •WACC of 9.5% What are the operating cash flows of this project? Enter your response as a regular dollar value, rounded to the nearest dollar. Of course, enter any negative number with a minus sign. Do not enter dollar signs, percent signs, or commas. For example, if you calculated 18,591.20, you would enter for your answer, 18591. Or if you calculated -420.84, you would enter -421. Operating Cash Flow Year 1 Year 2 $ $ +A Year 3 Year 4 $ tA The information below illustrates data regarding a capital investment project: Initial investment of $825,000 .Installation costs of 75,000 • Completed market viability study costing $50,000 · EBIT in year 1 of $100,000, growing at 8% per year for 4 years Straight-line depreciation of $162,500 annually Tax rate of 20% •WACC of 9.5% What are the operating cash flows of this project? Enter your response as a regular dollar value, rounded to the nearest dollar. Of course, enter any negative number with a minus sign. Do not enter dollar signs, percent signs, or commas. For example, if you calculated 18,591.20, you would enter for your answer, 18591. Or if you calculated -420.84, you would enter -421. Operating Cash Flow Year 1 Year 2 $ $ +A Year 3 Year 4 $ tA

Answer rating: 100% (QA)

To calculate the operating cash flows for each year of the project we need to consider the EBIT Earn... View the full answer