Using the eight-year model and the estimated expenses below, please answer the following questions showing calculations please.
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Using the eight-year model and the estimated expenses below, please answer the following questions showing calculations please. I need to check my work.
Estimated Expenses
- Total projected up-front costs: $2,200,000
- Total projected cost of capital: $195,000
- Total projected sales: $925,000
- Total projected cash expense: $310,000
- Total projected depreciation: $250,000
1. At the end of the project, what are the earnings before taxes?
2. At the current tax rate (35%), what is the net income?
3. Compute the project's after-tax cash flow: Operating cash flow equals Sales - Costs - Depreciation (1 - t) + Depreciation - change in net working capital.
4. Compute and interpret the project's NPV, IRR, and profitability index.
Related Book For
Financial Accounting and Reporting a Global Perspective
ISBN: 978-1408076866
4th edition
Authors: Michel Lebas, Herve Stolowy, Yuan Ding
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