Epiphany Industries is considering a new capital budgeting project that will last for three years. Epiphan plans on using a cost of capital of 12% to evaluate this project. Based on extensive research, it has prepared the following incremental cash flow projection: Year Sales (Revenues) - Cost of Goods Sold (50% of Sales) - Depreciation EBIT Taxes (35%) = unlevered net income + Depreciation -/+ increase/(decrease) in working capital capital expenditures Show Transcribed Text 3 -90,000 The free cash flow for the first year of Epiphany's project is A. $53,200 B. $45,600 C. $28,500 D. $38,000 1 100,000 2 5,000 100,000 3 50,000 50,000 50,000 30,000 30,000 30,000 20,000 20,000 20,000 7,000 7,000 7,000 13,000 13,000 13,000 30,000 30,000 30,000 5,000 100,000 5,000

Epiphany Industries is considering a new capital budgeting project that will last for three years. Epiphan plans on using a cost of capital of 12% to evaluate this project. Based on extensive research, it has prepared the following incremental cash flow projection: Year Sales (Revenues) - Cost of Goods Sold (50% of Sales) - Depreciation EBIT Taxes (35%) = unlevered net income + Depreciation -/+ increase/(decrease) in working capital capital expenditures Show Transcribed Text 3 -90,000 The free cash flow for the first year of Epiphany's project is A. $53,200 B. $45,600 C. $28,500 D. $38,000 1 100,000 2 5,000 100,000 3 50,000 50,000 50,000 30,000 30,000 30,000 20,000 20,000 20,000 7,000 7,000 7,000 13,000 13,000 13,000 30,000 30,000 30,000 5,000 100,000 5,000

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Description: Epiphany Industries is considering a new capital budgeting project that will last for three years. Epiphanyplans on using a cost of capital of 12% to evaluate this project. Based on extensive research, it hasprepared the following incremental cash f

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 7PA: There are two projects under consideration by the Rainbow factory. Each of the projects will require...

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Epiphany Industries is considering a new capital budgeting project that will last for three years. Epiphany plans on using a cost of capital of 12% to evaluate this project. Based on extensive research, it has prepared the following incremental cash flow projects: Year Sales (Revenues) Cost of Goods Sold (50% of Sales) - Depreciation = EBIT - Taxes (20%) = unlevered net income - 0 OA. $37,500 OB. $60,000 OC. $50,000 O D. $70,000 1 125,000 62,500 25,000 37,500 7,500 30,000 25,000 - 5000 + Depreciation + changes to working capital - capital expenditures - 90,000 The free cash flow for the first year of Epiphany's project is closest to: 2 125,000 62,500 25,000 37,500 7,500 30,000 25,000 -5000 3 125,000 62,500 25,000 37,500 7,500 30,000 25,000 -5000
Epiphany Industries is considering a new capital budgeting project that will last for three years. Epiphany plans on using a cost of capital of 12% to evaluate this project. Based on extensive research, it has prepared the following incremental cash flow projects: 0 Year Sales (Revenues) - Cost of Goods Sold (50% of Sales) - Depreciation = EBIT - Taxes (20%) unlevered net income + Depreciation + changes to working capital - capital expenditures OA. $60,000 OB. $80,000 OC. $112,000 OD. $96,000 - 90,000 1 200,000 100,000 25,000 75,000 15,000 60,000 25,000 <-5000 2 3 200,000 200,000 100,000 100,000 25,000 25,000 75,000 75,000 15,000 15,000 60,000 60,000 25,000 25,000 <-5000 -5000 Sam ns. FIN df FIN
Epiphany Industries is considering a new capital budgeting project that will last for three years. The projec Time left 1:29:41 initial investment of $90,000 in year 0. Epiphany plans on using an opportunity cost of capital of 12% to evaluate this project. Based on extensive research, it has prepared the following incremental cash flow projections: Sales (Revenues) Cost of Goods Sold (50% of Sales) Depreciation EBIT Taxes (30%) Profit after tax Changes in NOWC The net present value (NPV) for Epiphany's Project is closest to: a. $39,000 b. $14,348 c. $29,400 O d. $35,364 Year 1 125 000 -62 500 -30 000 32 500 -9 750 22 750 5 000 Year 2 125 000 -62 500 -30 000 32 500 -9 750 22 750 5 000 Year 3 125 000 -62 500 -30 000 32 500 -9 750 22 750 -10 000