rome File Edit View History Bookmarks People Window Help My Akron Experience ×Yi

Question

rome File Edit View History Bookmarks People Window Help My Akron Experience ×Yi, adverse selection-ApxwMcGraw-Hill Connect-Xy C | ezto.mheducation.com/hm.tpx M Chapter 10 , Debate education -Vocab Testing] The Economist tusa German Math Onli Question 6 (of 7 value 10.00 points Summer Tyme, Inc, is considering a new 4-year expansion project that requires an initial fixed asset Investment of $3.240 million. The fixed asset will be depreciated straight-line to zero over its 4-year tax life, after which time t will be costs of $1,152,000. worthless. The project is estimated to generate $2,880,000 in annual sales, with Required: r the tax rate is 34 percent, what is the OCF for this project? O $1415.880 O $605,880 O $1728.000 O $1345.086 O $1.486.674 References eBook & Resources Multiole Choice Leanina Obiettio 10-01 How to

Explanation / Answer

Option A

Sales=2880000

Costs=1152000

Depreciation=3.24/4=0.81 million

Net Income=(Sales-Costs-Depreciation)*(1-Tax rate)=(2880000-1152000-81000)*(1-34%)=605880

Operating Cash Flow=Net Income +Depreciation=605880+81000=1415880

Related Questions

Navigate

• Browse (All)
• Browse R
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.