Bennett Company has a potential new project that is expected to generate annual revenues of $261,200, with variable costs of $143,600, and fixed costs of $61,000. To finance the new project, the company will need to issue new debt that will have an annual interest expense of $24,000. The annual depreciation is $25,000 and the tax rate is 21 percent. What is the annual operating cash flow?
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- Falkland, Inc., is considering the purchase of a patent that has a cost of $50,000 and an estimated revenue producing life of 4 years. Falkland has a cost of capital of 8%. The patent is expected to generate the following amounts of annual income and cash flows: A. What is the NPV of the investment? B. What happens if the required rate of return increases?Jasmine Manufacturing is considering a project that will require an initial investment of $52,000 and is expected to generate future cash flows of $10,000 for years 1 through 3, $8,000 for years 4 and 5, and $2,000 for years 6 through 10. What is the payback period for this project?Your company is planning to purchase a new log splitter for is lawn and garden business. The new splitter has an initial investment of $180,000. It is expected to generate $25,000 of annual cash flows, provide incremental cash revenues of $150,000, and incur incremental cash expenses of $100,000 annually. What is the payback period and accounting rate of return (ARR)?
- Bennett Company has a potential new project that is expected to generate annual revenues of $256,700, with variable costs of $141,600, and fixed costs of $59,500. To finance the new project, the company will need to issue new debt that will have an annual interest expense of $21,500. The annual depreciation is $24,000 and the tax rate is 21 percent. What is the annual operating cash flow?Bennett Company has a potential new project that is expected to generate annual revenues of $ 264,800, with variable costs of $ 145, 200, and fixed costs of $62,200. To finance the new project, the company will need to issue new debt that will have an annual interest expense of $26,000. The annual depreciation is $25,800 and the tax rate is 21 percent. What is the annual operating cash flow? Multiple Choice $50, 764 $128, 372 $83,200 $181,812 $40, 172Give typing answer with explanation and conclusion Bennett Company has a potential new project that is expected to generate annual revenues of $258,500, with variable costs of $142,400, and fixed costs of $60,100. To finance the new project, the company will need to issue new debt that will have an annual interest expense of $22,500. The annual depreciation is $24,400 and the tax rate is 21 percent. What is the annual operating cash flow? Multiple Choice $43,260 $125,860 $49,364 $176,216 $80,400
- A project with a life of 8 years is expected to provide annual sales of $440,000 and costs of $317,000. The project will require an investment in equipment of $760,000, which will be depreciated on a straight-line method over the life of the project. You feel that both sales and costs are accurate to +/-15 percent. The tax rate is 35 percent. What is the annual operating cash flow for the best-case scenario?A 9-year project is expected to generate annual sales of 189,000 with costs of $93,500. The equipment necessary for the project will cost $320,000 and will be depreciated on a straight-line method over the life of the project. You feel that both sales and costs are accurate to +/-15 percent. The tax rate is 21 percent. What is the annual operating cash flow for the worst-case scenario?A 7-year project is expected to provide annual sales of $221,000 with costs of $97,500. The equipment necessary for the project will cost $360,000 and will be depreciated on a straight-line method over the life of the project. You feel that both sales and costs are accurate to +/-15 percent. The tax rate is 35 percent. What is the annual operating cash flow for the worst-case scenario?
- A project with a life of 7 years is expected to provide annual sales of $270,000 and costs of $181,000. The project will require an investment in equipment of $505,000, which will be depreciated on a straight-line method over the life of the project. You feel that both sales and costs are accurate to +/-10 percent. The tax rate is 21 percent. What is the annual operating cash flow for the best-case scenario? Multiple Choice O O $80,460 $95,907 $82,497 $55,197 $121,089BadRock Corp is evaluating a project with revenues will be $3.5 million and cash expenses will be $1.5 million while depreciation expense will be $400 000 per year, then what is the expected free cash flow per year from taking the project if the company's tax rate is 30 per cent?. Cols Communications is trying to estimate the first-year cash flow (at Year 1) for a proposed project. The financial staff has collected the following information on the project: Sales revenues $15 million Operating costs (excluding depreciation) 10.5 million Depreciation 3 million Interest expense 3 million The company has a 40% tax rate, and its WACC is 11%. What is the project’s cash flow for the first year (t = 1)? If the tax rate dropped to 30%, what is the project’s cash flow for the first year (t = 1)?