As Assistant to the CFO of Boulder Inc A $\$ 5,950$

question 47

Short Answer

As assistant to the CFO of Boulder Inc., you must estimate the Year 1 cash flow for a project with the following data. What is the Year 1 cash flow? $\begin{array}{lr}\text { Sales revenues } & \$ 13,000 \\\text { Depreciation } & \$ 4,000 \\\text { Other operating costs } & \$ 6,000 \\\text { Tax rate } & 35.0 \%\end{array}$

a. $\$ 5,950$
b. $\$ 6,099$
c. $\$ 6,251$
d. $\$ 6,407$
e. $\$ 6,568$

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Definitions:

Fair Value

The projected proceeds from the sale of an asset or the financial burden of transferring a liability in a harmonious transaction between entities in the market at the date of measuring.

Loans Payable

Obligations of a company to repay borrowed money in the future.

Impaired

A term used to describe an asset whose market value has decreased below its book value on the balance sheet.

Goodwill

An intangible asset that arises when a company acquires another business for more than the fair value of its tangible and identifiable intangible assets.