Question

A project will generate sales of $74,406 each. The variable costs are $8,750 and the fixed costs are $15,553. The project will use an equipment worth $112,232 that will be depreciated on a straight-line basis to a zero book value over a 20-year life of the project. If the tax rate is 13%, what is the operating cash flow? Note: Enter your answer rounded off to two decimal points.

Name: a project will generate sales of 74406 each the variable costs are 8750 and the fixed costs are 15553 the project will use an equipment worth 112232 that will be depreciated on a straight line basis t
Uploaded: 2024-01-15T12:31:39-08:00
Duration: 3 min 15 s
Channel: Matthew Wagner
Description: a project will generate sales of 74406 each the variable costs are 8750 and the fixed costs are 15553 the project will use an equipment worth 112232 that will be depreciated on a straight line basis t

          A project will generate sales of $74,406 each. The variable costs are $8,750 and the fixed costs are $15,553. The project will use an equipment worth $112,232 that will be depreciated on a straight-line basis to a zero book value over a 20-year life of the project. If the tax rate is 13%, what is the operating cash flow?

Note: Enter your answer rounded off to two decimal points.

Added by Tay M.

Mathematics for Finance An Introduction to Financial Engineering

Marek Capinski 1st Edition

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Solved by Expert Matthew Wagner

01/15/2024

Step 1

The equipment worth $112,232 will be depreciated on a straight-line basis over 20 years. To calculate the annual depreciation expense, divide the initial cost of the equipment by the number of years over which it will be depreciated. Depreciation expense = Show more…

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A project will generate sales of $74,406 each. The variable costs are $8,750 and the fixed costs are $15,553. The project will use an equipment worth $112,232 that will be depreciated on a straight-line basis to a zero book value over a 20-year life of the project. If the tax rate is 13%, what is the operating cash flow? Note: Enter your answer rounded off to two decimal points.