Fin 5130 – Which Of The Following Cash Flows Are Not Considered In The Calculation

Question 1Which of the following cash flows are NOT considered in the calculation of the initial outlay for a capital investment proposal?Interest expense related to financing a projectCost of Installing new equipmentAll of the above should be consideredEquipment CostIncrease in net working capital requirements1 pointsQuestion 2A project has an initial requirement of $169,755 for new equipment and $8,187 for net working capital. The fixed assets will be depreciated to a zero book value over the 3-year life of the project and have an estimated salvage value of $96,523. All of the net working capital will be recouped at the end of the project. The annual operating cash flow is $60,949 and the cost of capital is 11% What is the project’s NPV if the tax rate is 35%?Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12. 345 then enter as 12. 35 in the answer box. 1 pointsQuestion 3A project requires $397,215 of equipment that is classified as 7-year property. What is the book value of this asset at the end of year 3 given the following MACRS depreciation allowances, starting with year one: 14. 29, 24. 49, 17. 49, 12. 49, 8. 93, 8. 92, 8. 93, and 4. 46 percent? Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12. 345 then enter as 12. 35 in the answer box. 1 pointsQuestion 4Sunk costs are a type of incremental cash flow that should be included in all capital-budgeting decisions. TrueFalse1 pointsQuestion 5A project requires $327,822 of equipment that is classified as 7-year property. What is the book value of this asset at the end of year 5 given the following MACRS depreciation allowances, starting with year one: 14. 29, 24. 49, 17. 49, 12. 49, 8. 93, 8. 92, 8. 93, and 4. 46 percent? Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12. 345 then enter as 12. 35 in the answer box. 1 pointsQuestion 6ABC Inc. has estimated the following revenues and expenses related phase I of a proposed new housing development? Incremental sales= $545,408, total cash expenses $328,085, depreciation $67,525, taxes 25%. What are the operating cash flows?Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12. 345 then enter as 12. 35 in the answer box. 1 pointsQuestion 7ABC Company has the following projections for Year 1 of a capital budgeting project. Year 1 Incremental Projections: Sales $725,216Variable Costs $43,172Fixed Costs $89,807Depreciation Expense $75,935Tax Rate 27%Calculate the operating cash flow for Year 1. Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12. 345 then enter as 12. 35 in the answer box. 1 pointsQuestion 8ABC Company has a proposed project that will generate sales of 425 units annually at a selling price of $171 each. The fixed costs are $6,602 and the variable costs per unit are $122. The project requires $28,022 of equipment that will be depreciated on a straight-line basis to a zero book value over the 4-year life of the project. That is, depreciation each year is $28,022/4. The salvage value of the fixed assets is $6,900 and the tax rate is 35 percent. What is the operating cash flow for year four?Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12. 345 then enter as 12. 35 in the answer box. 1 pointsQuestion 9ABC has a proposed project which will generate sales of 185 units at a selling price of $374 each. The fixed costs are $23,948 and the variable costs per unit are $21. The project requires $121,633 of machinery which will be depreciated on a straight-line basis over the 5-year life of the project. That is, depreciation each year is $121,633/5. The tax rate is 25%. What is the operating cash flow for year 5?Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12. 345 then enter as 12. 35 in the answer box. 1 pointsQuestion 10ABC Company purchased some new equipment 2 years ago for $229,472. Today, it is selling this equipment for $48,486. What is the aftertax cash flow from this sale if the tax rate is 29 percent? The MACRS allowance percentages are as follows, commencing with year one: 20. 00, 32. 00, 19. 20, 11. 52, 11. 52, and 5. 76 percent. Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12. 345 then enter as 12. 35 in the answer box. 1 pointsQuestion 11A project requires $46,489 of equipment that is classified as 7-year property. What is the depreciation expense in year 3 given the following MACRS depreciation allowances, starting with year one: 14. 29, 24. 49, 17. 49, 12. 49, 8. 93, 8. 92, 8. 93, and 4. 46 percent? Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12. 345 then enter as 12. 35 in the answer box. 1 pointsQuestion 12ABC Company purchased $44,546 of equipment 5 years ago. The equipment is 7-year MACRS property. The firm is selling this equipment today for $9,123. What is the aftertax cash flow from this sale if the tax rate is 29 percent? The MACRS allowance percentages are as follows, commencing with year one: 14. 29, 24. 49, 17. 49, 12. 49, 8. 93, 8. 92, 8. 93, and 4. 46 percent. Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12. 345 then enter as 12. 35 in the answer box. 1 pointsQuestion 13ABC Inc. has estimated the following revenues and expenses related phase I of a proposed new housing development? Incremental sales= $6,877,793, total cash expenses $2,588,629, depreciation $306,087, taxes 37%, interest expense, $200,000. What are the operating cash flows?Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12. 345 then enter as 12. 35 in the answer box. 1 pointsQuestion 14A project has an initial requirement of $230,475 for new equipment and $9,710 for net working capital. The installation costs to get the new equipment in working condition are 13,913. The fixed assets will be depreciated to a zero book value over the 4-year life of the project and have an estimated salvage value of $91,115. All of the net working capital will be recouped at the end of the project. The annual operating cash flow is $115,732 and the cost of capital is 18% What is the project’s NPV if the tax rate is 37%?Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12. 345 then enter as 12. 35 in the answer box. 1 pointsQuestion 15ABC Company purchased $21,400 of equipment 4 years ago. The equipment is 7-year MACRS property. The firm is selling this equipment today for $6,342. What is the aftertax cash flow from this sale if the tax rate is 25 percent? The MACRS allowance percentages are as follows, commencing with year one: 14. 29, 24. 49, 17. 49, 12. 49, 8. 93, 8. 92, 8. 93, and 4. 46 percent. Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12. 345 then enter as 12. 35 in the answer box. 1 pointsQuestion 16ABC Corporation is considering an expansion project. The necessary equipment could be purchased for $27,000 and shipping and installation costs are another $679. The project will also require an initial $3,360 investment in net working capital. The company’s tax rate is 40%. What is the project’s initial investment outlay?Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12. 345 then enter as 12. 35 in the answer box. 1 pointsQuestion 17The net working capital invested in a project is generally: recovered at the end of the project. a sunk cost. recovered at the start of the project. depreciated to a zero balance over the life of the project. an opportunity cost. 1 pointsQuestion 18A project has an annual operating cash flow of $18,685. Initially, this 4-year project required $2,917 in net working capital, which is recoverable when the project ends. The firm also spent $10,000 on equipment to start the project. This equipment will have a book value of $3,271 at the end of year 4. What is the total cash flow for year 4 of the project if the equipment can be sold for $5,331 and the tax rate is 28%?Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12. 345 then enter as 12. 35 in the answer box. 1 points Click Save and Submit to save and submit. Click Save All Answers to save all answers.

Fin 5130 – Which Of The Following Cash Flows Are Not Considered In The Calculation

Question 1Which of the following cash flows are NOT considered in the calculation of the initial outlay for a capital investment proposal?Interest expense related to financing a projectCost of Installing new equipmentAll of the above should be consideredEquipment CostIncrease in net working capital requirements1 pointsQuestion 2A project has an initial requirement of $169,755 for new equipment and $8,187 for net working capital. The fixed assets will be depreciated to a zero book value over the 3-year life of the project and have an estimated salvage value of $96,523. All of the net working capital will be recouped at the end of the project. The annual operating cash flow is $60,949 and the cost of capital is 11% What is the project’s NPV if the tax rate is 35%?Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12. 345 then enter as 12. 35 in the answer box. 1 pointsQuestion 3A project requires $397,215 of equipment that is classified as 7-year property. What is the book value of this asset at the end of year 3 given the following MACRS depreciation allowances, starting with year one: 14. 29, 24. 49, 17. 49, 12. 49, 8. 93, 8. 92, 8. 93, and 4. 46 percent? Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12. 345 then enter as 12. 35 in the answer box. 1 pointsQuestion 4Sunk costs are a type of incremental cash flow that should be included in all capital-budgeting decisions. TrueFalse1 pointsQuestion 5A project requires $327,822 of equipment that is classified as 7-year property. What is the book value of this asset at the end of year 5 given the following MACRS depreciation allowances, starting with year one: 14. 29, 24. 49, 17. 49, 12. 49, 8. 93, 8. 92, 8. 93, and 4. 46 percent? Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12. 345 then enter as 12. 35 in the answer box. 1 pointsQuestion 6ABC Inc. has estimated the following revenues and expenses related phase I of a proposed new housing development? Incremental sales= $545,408, total cash expenses $328,085, depreciation $67,525, taxes 25%. What are the operating cash flows?Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12. 345 then enter as 12. 35 in the answer box. 1 pointsQuestion 7ABC Company has the following projections for Year 1 of a capital budgeting project. Year 1 Incremental Projections: Sales $725,216Variable Costs $43,172Fixed Costs $89,807Depreciation Expense $75,935Tax Rate 27%Calculate the operating cash flow for Year 1. Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12. 345 then enter as 12. 35 in the answer box. 1 pointsQuestion 8ABC Company has a proposed project that will generate sales of 425 units annually at a selling price of $171 each. The fixed costs are $6,602 and the variable costs per unit are $122. The project requires $28,022 of equipment that will be depreciated on a straight-line basis to a zero book value over the 4-year life of the project. That is, depreciation each year is $28,022/4. The salvage value of the fixed assets is $6,900 and the tax rate is 35 percent. What is the operating cash flow for year four?Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12. 345 then enter as 12. 35 in the answer box. 1 pointsQuestion 9ABC has a proposed project which will generate sales of 185 units at a selling price of $374 each. The fixed costs are $23,948 and the variable costs per unit are $21. The project requires $121,633 of machinery which will be depreciated on a straight-line basis over the 5-year life of the project. That is, depreciation each year is $121,633/5. The tax rate is 25%. What is the operating cash flow for year 5?Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12. 345 then enter as 12. 35 in the answer box. 1 pointsQuestion 10ABC Company purchased some new equipment 2 years ago for $229,472. Today, it is selling this equipment for $48,486. What is the aftertax cash flow from this sale if the tax rate is 29 percent? The MACRS allowance percentages are as follows, commencing with year one: 20. 00, 32. 00, 19. 20, 11. 52, 11. 52, and 5. 76 percent. Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12. 345 then enter as 12. 35 in the answer box. 1 pointsQuestion 11A project requires $46,489 of equipment that is classified as 7-year property. What is the depreciation expense in year 3 given the following MACRS depreciation allowances, starting with year one: 14. 29, 24. 49, 17. 49, 12. 49, 8. 93, 8. 92, 8. 93, and 4. 46 percent? Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12. 345 then enter as 12. 35 in the answer box. 1 pointsQuestion 12ABC Company purchased $44,546 of equipment 5 years ago. The equipment is 7-year MACRS property. The firm is selling this equipment today for $9,123. What is the aftertax cash flow from this sale if the tax rate is 29 percent? The MACRS allowance percentages are as follows, commencing with year one: 14. 29, 24. 49, 17. 49, 12. 49, 8. 93, 8. 92, 8. 93, and 4. 46 percent. Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12. 345 then enter as 12. 35 in the answer box. 1 pointsQuestion 13ABC Inc. has estimated the following revenues and expenses related phase I of a proposed new housing development? Incremental sales= $6,877,793, total cash expenses $2,588,629, depreciation $306,087, taxes 37%, interest expense, $200,000. What are the operating cash flows?Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12. 345 then enter as 12. 35 in the answer box. 1 pointsQuestion 14A project has an initial requirement of $230,475 for new equipment and $9,710 for net working capital. The installation costs to get the new equipment in working condition are 13,913. The fixed assets will be depreciated to a zero book value over the 4-year life of the project and have an estimated salvage value of $91,115. All of the net working capital will be recouped at the end of the project. The annual operating cash flow is $115,732 and the cost of capital is 18% What is the project’s NPV if the tax rate is 37%?Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12. 345 then enter as 12. 35 in the answer box. 1 pointsQuestion 15ABC Company purchased $21,400 of equipment 4 years ago. The equipment is 7-year MACRS property. The firm is selling this equipment today for $6,342. What is the aftertax cash flow from this sale if the tax rate is 25 percent? The MACRS allowance percentages are as follows, commencing with year one: 14. 29, 24. 49, 17. 49, 12. 49, 8. 93, 8. 92, 8. 93, and 4. 46 percent. Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12. 345 then enter as 12. 35 in the answer box. 1 pointsQuestion 16ABC Corporation is considering an expansion project. The necessary equipment could be purchased for $27,000 and shipping and installation costs are another $679. The project will also require an initial $3,360 investment in net working capital. The company’s tax rate is 40%. What is the project’s initial investment outlay?Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12. 345 then enter as 12. 35 in the answer box. 1 pointsQuestion 17The net working capital invested in a project is generally: recovered at the end of the project. a sunk cost. recovered at the start of the project. depreciated to a zero balance over the life of the project. an opportunity cost. 1 pointsQuestion 18A project has an annual operating cash flow of $18,685. Initially, this 4-year project required $2,917 in net working capital, which is recoverable when the project ends. The firm also spent $10,000 on equipment to start the project. This equipment will have a book value of $3,271 at the end of year 4. What is the total cash flow for year 4 of the project if the equipment can be sold for $5,331 and the tax rate is 28%?Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12. 345 then enter as 12. 35 in the answer box. 1 points Click Save and Submit to save and submit. Click Save All Answers to save all answers.