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4. Cash Flow Estimation & Capital Budgeting Analys...

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4. Cash Flow Estimation & Capital Budgeting Analysis We assume that the company you selected is considering a new project. The project has 8 years? life. This project requires initial investment of $180 million to purchase land, construct building, and purchase equipment, and $12 million for shipping & installation fee. The fixed assets fall in the 7-year MACRS class. The salvage value of fixed assets is $25 million. The number of units of the new product expected to be sold in the first year is 870,000 and the expected annual growth rate is 10%. The sales price is $250 per unit and the variable cost is $175 per unit in the first year, but they should be adjusted accordingly based on the estimated annualized inflation rate of 2.5%. The required net operating working capital (NOWC) is 18% of sales. The company is in the 33% tax bracket. The project is assumed to have the same risk as the corporation, so you should use the WACC you obtained from prior steps as the discount rate. The project is assumed to have the same risk as the corporation, so you should use the WACC you obtained from prior steps as the discount rate. Compute the depreciation basis and annual depreciation of the new project. (Please refer to table 12-3 MACRS allowances),hi, i'm just wondering if you are able to help me with finance term paper? the deadline is 3 weeks from now and it estimate 10 pages long.if so please let me know the fee quote thanks

 

Paper#8482 | Written in 18-Jul-2015

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