You are evaluating a project for The Ultimate recreational tennis racket, guaranteed to correct that wimpy backhand. You estimate the sales price of The Ultimate to be $300 per unit and sales volume to be 1,000 units in year 1;1,250 units in year 2; and 1,325 units in year 3. The project has a 3-year life. Variable costs amount to $175 per unit and fixed costs are $ 100,000 per year. The project requires an initial investment of $135,000 in assets, which can be depreciated using bonus depreciation. The actual market value of these assets at the end of year 3 is expected to be $25,000. NWC requirements at the beginning of each year will be approximately 20 percent of the projected sales during the coming year. The tax rate is 21 percent and the required return on the project is 12 percent. (Use SL depreciation table) What will the cash flows for this project be? Note: Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places. (ignore answers written already) You are evaluating a project for The Unmate recreational tennis racket, guaranteed to correct that wimpy beckhand. You essmate the sales price of The Utimato to be 5300 par unt and sudes volumes to be 1,000 units in your 1; 1,250 units in yur 2; and 1,325 units in year 3. The project has a 3-year the variable costs amount to 5175 per unit and fixed costs are $100,000 per year. The project requires an inntal investment of $135,000 in ass which can be depreciated using bonus deprecation. The actual market value of these assels at the end of year 3 is expected to be $25,000. NWC requirements at the beginning of each year will be approximely 20 percent of the projected sores during the coming year. The tax rate is 21 percent and the required return on the project is 12 percent. (Use S1 downtiation inc) Whet will the cash tows for this project be? Note: Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places. 1 2 (1000000) 13,450.00
You are evaluating a project for The Ultimate recreational tennis racket, guaranteed to correct that wimpy backhand. You estimate the sales price of The Ultimate to be $300 per unit and sales volume to be 1,000 units in year 1;1,250 units in year 2; and 1,325 units in year 3. The project has a 3-year life. Variable costs amount to $175 per unit and fixed costs are $ 100,000 per year. The project requires an initial investment of $135,000 in assets, which can be depreciated using bonus depreciation. The actual market value of these assets at the end of year 3 is expected to be $25,000. NWC requirements at the beginning of each year will be approximately 20 percent of the projected sales during the coming year. The tax rate is 21 percent and the required return on the project is 12 percent. (Use SL depreciation table) What will the cash flows for this project be? Note: Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places. (ignore answers written already) You are evaluating a project for The Unmate recreational tennis racket, guaranteed to correct that wimpy beckhand. You essmate the sales price of The Utimato to be 5300 par unt and sudes volumes to be 1,000 units in your 1; 1,250 units in yur 2; and 1,325 units in year 3. The project has a 3-year the variable costs amount to 5175 per unit and fixed costs are $100,000 per year. The project requires an inntal investment of $135,000 in ass which can be depreciated using bonus deprecation. The actual market value of these assels at the end of year 3 is expected to be $25,000. NWC requirements at the beginning of each year will be approximely 20 percent of the projected sores during the coming year. The tax rate is 21 percent and the required return on the project is 12 percent. (Use S1 downtiation inc) Whet will the cash tows for this project be? Note: Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places. 1 2 (1000000) 13,450.00
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Transcribed Image Text:You are evaluating a project for The Ultimate
recreational tennis racket, guaranteed to correct that
wimpy backhand. You estimate the sales price of The
Ultimate to be $300 per unit and sales volume to be
1,000 units in year 1;1,250 units in year 2; and 1,325
units in year 3. The project has a 3-year life. Variable
costs amount to $175 per unit and fixed costs are $
100,000 per year. The project requires an initial
investment of $135,000 in assets, which can be
depreciated using bonus depreciation. The actual
market value of these assets at the end of year 3 is
expected to be $25,000. NWC requirements at the
beginning of each year will be approximately 20
percent of the projected sales during the coming year.
The tax rate is 21 percent and the required return on
the project is 12 percent. (Use SL depreciation table)
What will the cash flows for this project be? Note:
Negative amounts should be indicated by a minus sign.
Round your answers to 2 decimal places. (ignore
answers written already)
You are evaluating a project for The Unmate recreational tennis racket, guaranteed to correct that wimpy beckhand. You essmate the
sales price of The Utimato to be 5300 par unt and sudes volumes to be 1,000 units in your 1; 1,250 units in yur 2; and 1,325 units in
year 3. The project has a 3-year the variable costs amount to 5175 per unit and fixed costs are $100,000 per year. The project requires
an inntal investment of $135,000 in ass which can be depreciated using bonus deprecation. The actual market value of these
assels at the end of year 3 is expected to be $25,000. NWC requirements at the beginning of each year will be approximely 20
percent of the projected sores during the coming year. The tax rate is 21 percent and the required return on the project is 12 percent.
(Use S1 downtiation inc)
Whet will the cash tows for this project be?
Note: Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places.
1
2
(1000000)
13,450.00
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