A proposed five-year project will require $627,000 for fixed assets, $196,000 for inventory, and $ 34,000 for accounts receivable. Accounts payable are expected to increase by $156,000. The fixed assets will be depreciated straight-line to a zero book value over five years. At the end of the project, the fixed assets can be sold for $255,000. The net working capital returns to its original level at the end of the project. The operating cash flow per year is $62,000. The tax rate is 35 percent and the discount rate is 12 percent. What is the total cash flow in the final year of the project? Group of answer choices $389,530 $358,430 $365,788 $330,030 $301,750

A proposed five-year project will require $627,000 for fixed assets, $196,000 for inventory, and $ 34,000 for accounts receivable. Accounts payable are expected to increase by $156,000. The fixed assets will be depreciated straight-line to a zero book value over five years. At the end of the project, the fixed assets can be sold for $255,000. The net working capital returns to its original level at the end of the project. The operating cash flow per year is $62,000. The tax rate is 35 percent and the discount rate is 12 percent. What is the total cash flow in the final year of the project? Group of answer choices $389,530 $358,430 $365,788 $330,030 $301,750

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Description: A proposed five-year project will require $627,000 for fixed assets, $196,000 for inventory, and $34,000 for accounts receivable. Accounts payable are expected to increase by $156,000. The fixedassets will be depreciated straight-line to a zero book

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 5P

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