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4. A firm is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life according

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4. A firm is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life according to MACRS and depreciation rates for such equipment are 33%, 45%, 15%, and 7% for Years 1 through 4, respectively. Revenues and other operating costs are expected to be constant over the project's 10-year expected life. What is the Year 2 cash flow? Equipment cost (depreciable basis) Sales revenues, each year Operating costs (excl. depreciation) $100,000 $60,000 $25,000 $4,000 20% Interest expense Tax rate

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