Question
A capital investment Tug has the following current and projected cash flows during the recovery period. Using MACRS depreciation with half-year convention, what will be
A capital investment Tug has the following current and projected cash flows during the recovery period. Using MACRS depreciation with half-year convention, what will be the present value of its cash flow after taxes in year three?
| Initial Cost ($) | $350,000 |
| Revenue ($/yr) | $150,000 |
| Maintenance ($/yr) | $20,000 |
| Tax Rate | 40% |
| Market Rate | 5% |
| Inflation Rate | 4% |
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