12. A project generates revenues of $6,000, cash expenses of $3,000 and deprecia
ID: 2806662 • Letter: 1
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12. A project generates revenues of $6,000, cash expenses of $3,000 and depreciation charges of S2.000 in a particular year. The firm's tax bracket is 35%. What is the operating cash flow (OCF) of the project for that year? (5pts.) A. $2,500 B. $2,600 C $2,650 D. $2,750 Please show your work below 13. The risk-free rate is 6% and the market risk premium is 9 %. The project's discount rate (required rate of return) is estimated based on the project's Beta. Which projects should be undertaken and why? (5 pts.). Note the discount rate of the project is based on Capital Asset Pricing Model (CAPM) which is equal to Risk free + Beta (Market Risk Premium)). Beta 2.0 1.5 1.0 IRR 25% 21% 14% Project A. Project P only B. Project R only C. Project P and Q only C. Project P, Q and R Please Show your workExplanation / Answer
c $2,650 As per chegg guidelines we answer one question per post. Kindly post remaining questions in next post Dear Student Thank you for using Chegg Please find below the answer and please give thumbs up Statementshowing Computations Paticulars Amount Q12 Revenues 6,000.00 Less Cash expense (3,000.00) Less depreciation (2,000.00) Income before tax 1,000.00 Less Tax at 35% (350.00) Income after tax 650.00 Add depreciation 2,000.00 Operating cash flow 2,650.00
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