Question: The Lumber Yard is considering adding a new product line that is expected to increase annual sales by $229,000 and cash expenses by $143,000. The

The Lumber Yard is considering adding a new product line that is expected to increase annual sales by $229,000 and cash expenses by $143,000. The initial investment will require $114,000 in fixed assets that will be depreciated using the 5-year MACRS. The company has a marginal tax rate of 28 percent. What is the project OCF in year 2? (Do not include the dollar sign ($). Round your answer to a whole dollar. (e.g., 4,132)

MACRS 5-year property

Year

Rate

1 20.00%

2 32.00%

3 19.20%

4 11.52%

5 11.52%

6 5.76%

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

60 6. The Lumber Yard is considering adding a new product line that is expected to increase annual sales by $352,000 and expenses by $244,000. The project will require $153,000 in fixed assets that...

thnx The Lumber Yard is considering adding a new product line that is expected to increase annual sales by $307000 and expenses by $200.000. The project will require $117.000 in fized assets that...

cash thews he eiedet in 1 percent, what is the project's NPV 8327 11.2208 822780.00 25 Christina invested $3,000 five years ago and earns 2 percent annual interest. By leaving 27) her interest...

2n Christina invested $3,000 five years ago and earns 2 percent annual interest. By leaving 27) her interest earnings in her account, she increases the amount of interest she earns each year. The way...

The Lumber Yard is considering adding a new product line that is expected to increase annual sales by $277,000 and expenses by $184,000. The project will require $93,000 in fixed assets that will be...

The Lumber Yard is considering adding a new product line that is expected to increase annual sales by $322,000 and expenses by $220,000. The project will require $129,000 in fixed assets that will be...

The Lumber Yard is considering adding a new product line that is expected to increase annual sales by $367,000 and expenses by $256,000. The project will require $165,000 in fixed assets that will be...

The Lumber Yard is considering adding a new product line that is expected to increase annual sales by $352,000 and expenses by $244,000. The project will require $153,000 in fixed assets that will be...

The Lumber Yard is considering adding a new product line that is expected to increase annual sales by $327,000 and expenses by $224,000. The project will require $133,000 in fixed assets that will be...

The Lumber Yard is considering adding a new product line that is expected to increase annual sales by $347,000 and expenses by $240,000. The project will require $149,000 in fixed assets that will be...

A 500-g (small) mass on the end of a 1.50-m-long string is pulled aside from the vertical and shoved downward (toward the bottom of its motion) with a speed of 2.00 m/s. (a) Is the angle on the other...

For each of the following calculate the Contribution Margin and the Contribution Margin % Contribution Margin Calculations Product A Product B 8 20 5 CM problem Sales Variable Costs Contribution...

QUESTION 3 Monitors encapsulate the shared data and its operation to restrict access. True False

10) For a bond that pays cash interest (i.e., not a zero coupon bond), YTM is (a) always equal to the coupon rate (b) always equal to the current yield (c) is always less than the coupon rate (d) can...

11. Are your speaking notes helpful and effective?

3. Pay attention to how you meet people and the general first impression you receive from them. Ask yourself what makes you feel the way you do about the person. Does the person make you feel...

The Goals of Informative Speaking Topics for Informative