A 4-year project has an annual operating cash flow of $50,000. At the beginning of the project,
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Question:
A 4-year project has an annual operating cash flow of $50,000. At the beginning of the project, $4,100 in net working capital was required, which will be recovered at the end of the project. The firm also spent $22,100 on equipment to start the project. This equipment will have a book value of $4,540 at the end of the project, but can be sold for $5,580. The tax rate is 34 percent. What is the Year 4 cash flow?
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