Question
21) An increasingly popular trend in mountain biking is to remove the chain and coast down the mountain. This has reduced demand for crank sets,
21) An increasingly popular trend in mountain biking is to remove the chain and coast down the mountain. This has reduced demand for crank sets, chains, and derailleurs. As a result, Endo Mountain Bikes Inc. is shutting down its bicycle propulsion plant. It purchased the plant 2 years ago for $310,000. It can sell the plant today for $169,087.6. The plant is in Class 43 with a depreciation rate of 30%. When the plant is closed, Endos net working capital will decrease by $50,000. EBITDA in the final year is $260,000. Endo's tax rate is 35%, and their cost of capital is 8%.
What are the terminal year cash flows?
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