What is te operating cash flow for this proyect in year 2? What is te operating
ID: 2646527 • Letter: W
Question
What is te operating cash flow for this proyect in year 2?
What is te operating cash flow for this proyect in year 3?
What is te operating cash flow for this proyect in year 4?
What is te operating cash flow for this proyect in year 5?
What is te operating cash flow for this proyect in year 6?
What is te operating cash flow for this proyect in year 7?
What is te operating cash flow for this proyect in year 8?
What is te operating cash flow for this proyect in year 9?
What is te operating cash flow for this proyect in year 10?
Operating cash flow (growing each year; MACRS). Miglietti Restaurants is looking at a project with the following forecasted sales: first-year sales quantity of 31,000 with an annual growth rate of 3.00% over the next ten years. The sales price per unit is 541.00 and will grow at 2.25% per year. The production costs are expected to be 56% of the current year's sales price. The manufacturing equipment to aid this project will have a total cost (including installation) of 52,400,000. It will be depreciated using MACRS, and has a seven-year MACRS life classification. Fixed costs are $300,000 per year. Miglietti Restaurants has a tax rate of 30%. What is the operating cash flow for this project over these ten years?Explanation / Answer
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Sales in Quantity 31,000 31,930 32,888 33,875 34,891 35,938 37,016 38,126 39,270 40,448 Sales Price per unit 41 41.92 42.86 43.82 44.81 45.82 46.85 47.9 48.98 50.08 Production Cost 22.96 22.96 22.96 22.96 22.96 22.96 22.96 22.96 22.96 22.96 Contribution margin 18.04 18.96 19.9 20.86 21.85 22.86 23.89 24.94 26.02 27.12 Total Contribution 559,240 605,393 654,471 706,633 762,368 821,543 884,312 950,862 1,021,805 1,096,950 Fixed Cost 300000 300000 300000 300000 300000 300000 300000 300000 300000 300000 Depreciation 342960 587760 419760 299760 214320 214320 214320 106800 Net Income before tax - 83,720 - 282,367 - 65,289 106,873 248,048 307,223 369,992 544,062 721,805 796,950 Tax Expenses - 25,116 - 84,710 - 19,587 32,062 74,415 92,167 110,998 163,219 216,542 239,085 Net Income - 58,604 - 197,657 - 45,702 74,811 173,634 215,056 258,995 380,844 505,264 557,865 Depreciation 342960 587760 419760 299760 214320 214320 214320 106800 Operating cash Flow 284,356 390,103 374,058 374,571 387,954 429,376 473,315 487,644 505,264 557,865
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