1516: Consider the following financial data for an investment project: required capital at n = 0, 100,000. Project service life: 10 years. Salvage value at n = 10: 30,000. Annual revenue: $200,000; annual O&M costs (not including depreciation): $50,000. Depreciation Method Seven years MACRS): tax rate: 40%

Part A: Determine the project cash flow at the end of year 10

$100,000

$110,000

$90,000

$118,000

Part B: Suppose the firm burrowed the entire capital investment at 10% interest over 10 years. If the required principal and interest payments in year 10 are:

Principal payment: $16,950

Interest payment: $1,620

What would the net cash flow be at the end of year 10?

93,017

83,067

88,064

90,078