A firm is considering a new project with a 4-year life with the following cost and revenue data. This project with require an investment of 120,000 SAR in new equipment.
This new equipment will be depreciated down to zero over 4 years using the simplified straight-line method and has no salvage value.
This new project will generate additional sales revenues of 100,000 SAR whereas additional operating costs, excluding depreciation, will be 63,000 SAR.
The company's marginal tax rate is 35 percent. What is the project free cash flow in year 1?