1. Johnson Industries is considering an expansion project. The necessary equipment could be purchased for 9 million, and the project would also require an initial 3 million investment in net operating working capital. The company's tax rate is 40 percent. What is the projects initial investment outlays?
2. Nixon Communications is trying to estimate the first-year operating cash flow (at t =1) for a proposed project. The financial staff has collected the following information:
The company faces a 40 percent tax rate. What is the project's operating cash flow for the first year (t = 1)?
3. Carter Air Lines is now in the terminal year of a project. The equipment originally cost 20 million, of which 80 percent has been depreciated. Carter can sell the used equipment today for another airline for 5 million, and its tax rate is 40 percent. What is the equipment after-tax net salvage value?© BrainMass Inc. brainmass.com September 19, 2018, 12:41 pm ad1c9bdddf - https://brainmass.com/business/discounted-cash-flows-model/operating-cash-flow-andinitial-investment-outlay-103429
Solution contains calculations of Operating cash flow and Initial Investment Outlay