PROJECT CASH FLOW Colsen Communications is trying to estimate the first-year cash flow (at Year 1) for...

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Finance

PROJECT CASH FLOW
Colsen Communications is trying to estimate the first-year cashflow (at Year 1) for a proposed project. The financial staff hascollected the following information on the project:
Sales revenues $10 million
Operating costs (excluding depreciation) 7 million
Depreciation 2 million
Interest expense 2 million
The company has a 40% tax rate, and its WACC is 12%.
Write out your answers completely. For example, 13 millionshould be entered as 13,000,000.
What is the project's cash flow for the first year (t = 1)?Round your answer to the nearest dollar.
$

If this project would cannibalize other projects by $1 millionof cash flow before taxes per year, how would this change youranswer to part a? Round your answer to the nearest dollar.
The firm's project's cash flow would now be $ .

Ignore part b. If the tax rate dropped to 35%, how would thatchange your answer to part a? Round your answer to the nearestdollar.
The firm's project's cash flow would -Select-increasedecreaseItem 3by $ .

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PROJECT CASH FLOWColsen Communications is trying to estimate the first-year cashflow (at Year 1) for a proposed project. The financial staff hascollected the following information on the project:Sales revenues$10 millionOperating costs (excluding depreciation)7 millionDepreciation2 millionInterest expense2 millionThe company has a 40% tax rate, and its WACC is 12%.Write out your answers completely. For example, 13 millionshould be entered as 13,000,000.What is the project's cash flow for the first year (t = 1)?Round your answer to the nearest dollar.$If this project would cannibalize other projects by $1 millionof cash flow before taxes per year, how would this change youranswer to part a? Round your answer to the nearest dollar.The firm's project's cash flow would now be $ .Ignore part b. If the tax rate dropped to 35%, how would thatchange your answer to part a? Round your answer to the nearestdollar.The firm's project's cash flow would -Select-increasedecreaseItem 3by $ .

Sales revenues	$10 million
Operating costs (excluding depreciation)	7 million
Depreciation	2 million
Interest expense	2 million