Question: The Lumber Yard is considering adding a new product line that is expected to increase annual sales by $248,000 and cash expenses by $150,000. The

The Lumber Yard is considering adding a new product line that is expected to increase annual sales by $248,000 and cash expenses by $150,000. The initial investment will require $117,000 in fixed assets that will be depreciated using the 5-year MACRS. The company has a marginal tax rate of 34 percent. What is the project OCF in year 2? (Do not include the dollar sign ($). 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...

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 $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 $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 $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 $337,000 and expenses by $232,000. The project will require $141,000 in fixed assets that will be...

The Lumber Yard is considering adding a new product line that is expected to increase annual sales by $292,000 and expenses by $196,000. The project will require $105,000 in fixed assets that will be...

The Lumber Yard is considering adding a new product line that is expected to increase annual sales by $372,000 and expenses by $260,000. The project will require $169,000 in fixed assets that will be...

The Lumber Yard is considering adding a new product line that is expected to increase annual sales by $ 3 8 2 , 0 0 0 and expenses by $ 2 6 8 , 0 0 0 . The project will require $ 1 7 7 , 0 0 0 in...

For the and c are positive integers between 1 and 6 inclusive. Use the mouse to rotate the surface. Two points on the cone are (0.5, 0, 1) and (0, 2, 1) a plot of the cone b= ( ) + ( ) = ( ) , ...

Cite two examples in which a force is exerted on an object without doing any work on the object.

Municipal bonds are: generally purchased by tax - exempt investors. Risk - free.

For the following transactions for Lululemon determine if total liabilities increase, decrease, or stay the same.Lululemon receives cash from a customer. The customer had previously purchased shorts...

What are the advantages and disadvantages of flextime?

What could Kathy have done to keep the situation from occurring?

How can Seaview improve their benefits communication? Discuss.