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1. A project requires an initial investment of $150 million in new equipment. The equipment is assumed to be depreciated straight-line to zero over its
1. A project requires an initial investment of $150 million in new equipment. The equipment is assumed to be depreciated straight-line to zero over its 10-year life. The pre-tax salvage value of the equipment at the end of the project is assumed to be 50 million. No additional net working capital is required for this project. The appropriate discount rate is 18%.
What is the operating cash flow in each year at the accounting break-even quantity?
A. 10 million
B. 15 million
C. 25 million
D. 5 million
E. Not be able to calculate the number
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