Colsen Communications Is Trying To Estimate The First Year Cash Flow At Year 1 For A Proposed Project The Assets Requ 1 (29.46 KiB) Viewed 38 times
Colsen Communications Is Trying To Estimate The First Year Cash Flow At Year 1 For A Proposed Project The Assets Requ 2 (13.45 KiB) Viewed 38 times
Colsen Communications is trying to estimate the first-year cash flow (at Year 1) for a proposed project. The assets required for the project were fully depreciated at the time of purchase. The financial staff has collected the following information on the project: Sales revenues $25 million Operating costs 22.5 million Interest expense 2 million The company has a 25% tax rate, and its WACC is 11%. Write out your answers completely. For example, 13 million should be entered as 13,000,000. a. What is the project's operating cash flow for the first year (t = 1)? Round your answer to the nearest dollar. b. If this project would cannibalize other projects by $1 million of cash flow before taxes per year, how would this change your answer to part a? Round your answer to the nearest dollar. The firm's OCF would now be $
Karsted Air Services is now in the final year of a project. The equipment originally cost $20 million, of which 100% has been depreciated. Karsted can seil the used equipment today for $8 million, and its tax rate is 30%. What is the equipment's after-tax salvage value? Write out your answer completely. For example, 13 million should be entered as 13,000,000. Round your answer to the nearest dollar. $
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