TaiGueLe Enterprises, Inc. is considering launching a new corporate project. The company will have to make Capital Investments, Invest in Changes in Net Working Capital, and generate Cash Flows from Operating the new project. The Equipment required for the project will cost $9,000,000 today, will last for six years (the length of the project), and is estimated at the time of purchase to sell for $600,000 at the end of its life. The company uses Straight-Line depreciation and has a Tax Rate of 20%. The appropriate discount rate for the risks involved is 12%. (Here is the picture attached) In year 6, the firm sells the capital equipment in line with their projection for $600,000. What is the firm's operating cash flow in year 3 ? Multiple Choice $1,209,600 none of the above $2,409,600 $3,819,200 $2,912,000
TaiGueLe Enterprises, Inc. is considering launching a new corporate project. The company will have to make Capital Investments, Invest in Changes in Net Working Capital, and generate Cash Flows from Operating the new project. The Equipment required for the project will cost $9,000,000 today, will last for six years (the length of the project), and is estimated at the time of purchase to sell for $600,000 at the end of its life. The company uses Straight-Line
(Here is the picture attached)
In year 6, the firm sells the capital equipment in line with their projection for $600,000.
What is the firm's operating cash flow in year 3 ?
Multiple Choice
-
$1,209,600
-
none of the above
-
$2,409,600
-
$3,819,200
-
$2,912,000
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