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##### As a member of Gamma Corporation's financial staff, you must estimate the Year 1 operating net cash flow

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As a member of Gamma Corporation's financial staff, you must estimate the Year 1 operating net cash flow for a proposed project with the following data. What is the Year 1 operating cash flow?;Sales \$33,000;Depreciation \$10,000;Other operating costs \$17,000;Interest expense \$4,000;Tax rate 35%;(Points: 4);\$ 9,500;\$10,600;\$11,700;\$12,800;\$13,900;6.;Delta Software is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life, after which it will be worthless, and it will be depreciated by the straight line method over 3 years. Revenues and other operating costs are expected to be constant over the project's 3-year life. What is the project's operating cash flow during Year 1?;Equipment cost (depreciable basis) \$75,000;Straight line depreciation rate 33.33%;Sales \$60,000;Operating costs excl. depr?n \$25,000;Tax rate 35%;(Points: 4);\$27,000;\$28,500;\$30,000;\$31,500;\$33,000;7.;Swannee Resorts is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life, would be depreciated by the straight line method over the project's 3 year life, and would have zero salvage value. No new working capital would be required. Revenues and other operating costs are expected to be constant over the project's 3-year life. What is the project's NPV? (Hint: Cash flows are constant in Years 1-3.);WACC 10%;Net investment cost (depreciable basis) \$65,000;Straight line depr?n rate 33.33%;Sales revenues \$70,000;Operating costs excl. depr?n \$25,000;Tax rate 35%;(Points: 4);\$22,156.24;\$23,791.14;\$24,354.87;\$25,189.71;\$26,599.05;8.;Big Air Services is now in the final year of a project. The equipment originally cost \$20 million, of which 75% has been depreciated. Big Air can sell the used equipment today for \$6 million, and its tax rate is 40%. What is the equipment?s after-tax net salvage value?;(Points: 4);\$500,000;\$600,000;\$700,000;\$800,000;\$900,000;9.;You work for Alpha Inc., and you must estimate the Year 1 operating net cash flow for a proposed project with the following data. What is the Year 1 operating cash flow?;Sales \$11,000;Depreciation \$4,000;Other operating costs \$6,000;Tax rate 35%;(Points: 4);\$4,650;\$4,800;\$4,950;\$5,100;\$5,250;10.;Your company, Beta Corporation, is considering a new project which you must analyze. Based on the following data, what is the project's Year 1 operating cash flow?;Sales \$22,000;Depreciation \$8,000;Other operating costs \$12,000;Tax rate 35%;(Points: 4);\$9,100;\$9,200;\$9,300;\$9,400;\$9,500

Paper#32818 | Written in 18-Jul-2015

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