A company is considering a 5-year project to open a new product line. A new machine...

70.2K

Verified Solution

Question

Finance

A company is considering a 5-year project to open a new productline. A new machine with an installed cost of $90,000 would berequired to manufacture their new product, which is estimated toproduce sales of $80,000 in new revenues each year. The cost ofgoods sold to produce these sales (not including depreciation) isestimated at 55% of sales, and the tax rate at this firm is 40%. Ifstraight-line depreciation is used to calculate annualdepreciation, what is the estimated annual operating cash flow fromthis project each year? (Answer to the nearest dollar.)

Answer & Explanation Solved by verified expert

4.0 Ratings (761 Votes)

SolutionThe Estimated annual Operating Cash Inflow from See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

A company is considering a 5-year project to open a new productline. A new machine with an installed cost of $90,000 would berequired to manufacture their new product, which is estimated toproduce sales of $80,000 in new revenues each year. The cost ofgoods sold to produce these sales (not including depreciation) isestimated at 55% of sales, and the tax rate at this firm is 40%. Ifstraight-line depreciation is used to calculate annualdepreciation, what is the estimated annual operating cash flow fromthis project each year? (Answer to the nearest dollar.)