Craig's Car Wash Inc. is considering a project that has thefollowing cash flow and cost of capital (r) data. What is theproject's discountedpayback?
| r. | 10.00% | | | |
| Year | 0 | 1 | 2 | 3 |
| Cash flows | ?$900 | $500 | $500 | $500 |
You have just landed an internship in the CFO's office ofHawkesworth Inc. Your first task is to estimate the Year 1 cashflow for a project with the following data. What is the Year 1 cashflow?
| Sales revenues | $13,000 |
| Depreciation | $4,000 |
| Other operating costs | $6,000 |
| Tax rate | 35.0% |
Your new employer, Freeman Software, is considering a newproject whose data are shown below. The equipment that would beused has a 3-year tax life, and the allowed depreciation rates forsuch property are 33.33%, 44.45%, 14.81%, and 7.41% for Years 1through 4. Revenues and other operating costs are expected to beconstant over the project's 10-year expected life. What is the Year1 cash flow?
| Equipment cost (depreciable basis) | $65,000 |
| Sales revenues, each year | $60,000 |
| Operating costs (excl. deprec.) | $25,000 |
| Tax rate | 35.0% |
