The Ford Corpor to produce auto parts. The business is expected to last for 6 years. They expect start- up costs of $4,500,000. Expenses are expected to be $600,000 per year. Revenues will be $700,000 per year. The Ford Corporation estimates that they can sell the facility for $9.000,000 at the end of 6 years. Assume revenue occurs at the end of each year and expenses occur at the beginning of each year. What is the annual cash flow and how many times this cash flow repeated for? A) C01-$100.000, FO1-6 B) C01-$100,000, FO1-5 OC) Co1-$1.600,000, FO1-6 O DI C01-$2.200,000, FO1-6 OE) Co1-S700,000. FO1-6
The Ford Corpor to produce auto parts. The business is expected to last for 6 years. They expect start- up costs of $4,500,000. Expenses are expected to be $600,000 per year. Revenues will be $700,000 per year. The Ford Corporation estimates that they can sell the facility for $9.000,000 at the end of 6 years. Assume revenue occurs at the end of each year and expenses occur at the beginning of each year. What is the annual cash flow and how many times this cash flow repeated for? A) C01-$100.000, FO1-6 B) C01-$100,000, FO1-5 OC) Co1-$1.600,000, FO1-6 O DI C01-$2.200,000, FO1-6 OE) Co1-S700,000. FO1-6
Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter11: Cash Flow Estimation And Risk Analysis
Section: Chapter Questions
Problem 8P: The Rodriguez Company is considering an average-risk investment in a mineral water spring project...
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Step 1
The annual cash flow is the cash flow that is received at the end of the year after deducting all the cash outflow.
Step 2
The computation of the annual cash flow is as follows:
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