Business, 23.11.2019 05:31 dornauriel

The blue lagoon is considering a project with a five-year life. the project requires $32,000 of fixed assets that are classified as five-year property for macrs. variable costs equal 67 percent of sales, fixed costs are $12,600, and the tax rate is 34 percent. what is the operating cash flow for year 4 given the following sales estimates and macrs depreciation allowance percentages?
year 1 2 3 4 5
sales $ 32,000 $ 34,500 $ 35,600 $ 38,900 $ 42,000
macrs rate 20.00 32.00 19.20 11.52 11.52
multiple choice
−$1,806.67
$640.89
$1,311.16
$1,409.80
−$2,276.60

Answers: 3

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Answers

Answer from: MathChic68

$1,409.80

Explanation:

Time line 0 1

Cost of new machine -32000

= Initial Investment outlay -32000

5 years MACR rate 20.00% 32.00%19.20%11.52%

Sales 32000 345003560038900

ProfitsSales-variable cost 10560 113851174812837

Fixed cost -12600 -12600-12600-12600

- Depreciation = Cost of machine*MACR% -6400 -10240-6144-3686.4

=Pretax cash flows -8440 -11455-6996-3449.4

-taxes = (Pretax cash flows)*(1 - tax) -5570.4 -7560.3-4617.36-2276.604

+ Depreciation 6400 1024061443686.4

= after tax operating cash flow 829.60 2679.701526.641409.796

2 3 4

5 years MACR rate 32.00% 19.20% 11.52%

Sales 34500 35600 38900

Profits Sales-variable cost 11385 11748 12837

Fixed cost -12600 -12600 -12600

- Depreciation = Cost of machine*MACR%-10240 -6144 -3686.4

=Pretax cash flows -11455 -6996 -3449.4

-taxes = (Pretax cash flows)*(1 - tax) -7560.3 -4617.36 -2276.604

+ Depreciation 10240 6144 3686.4

= after tax operating cash flow 2679.70 1526.64 1409.796

Therefore, The operating cash flow for Year 4 given the following sales estimates and MACRS depreciation allowance percentages is $1409.796

Answer from: Quest

answer; i believe that the correct answer is ( secondary research); //

Answer from: Quest

the investment was $14,174.196

explanation:

a lump sum means that the father of the example made one deposit and leave it be.

we need to know the value of a capital that generated at 4.05% per year during 28 years the sum of $48,613.24

$capital * (1+0.045)^{28} = 48,613.24$

now clearing the formula to solve for capital we got:

$capital = \frac{48,613.24}{(1+0.045)^{28}}$

and we reach the answer investment = $14,174.20

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