TABLE 4 You are considering a new product launch: Equipment for the project will cost $875,000 The project will have a four-year life, and have no salvage value. Depreciation is straight-line to zero over the four years. The required retum on the project is 11%, and the tax rate is 35%. Projected annual sales and cost figures are shown below (sales and costs are estimated to be ident: Based on the information given, calculate OCF and NPV Equipment cost Project length (years) Required return Tax rate $875,000 4 11% 35% Annual Sales Annual Variable costs Annual Fixed costs Annual Depreciation Annual EBIT Annual Taxes $3,948,000 $2,869,000 $345,000 Annual OCF Cash flows YEAR 2 PROJECT NPV you MUST use NPV fi

Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can resu…

Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.

A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the a…

In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately…

At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial repor…