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A four-year project has cash flows before taxes and depreciation of $12,000 per year. The project requires the purchase of a $50,000 asset that will
A four-year project has cash flows before taxes and depreciation of $12,000 per year. The project requires the purchase of a $50,000 asset that will be depreciated over five years straight-line. At the end of the fourth year the asset will be sold for $14,000. The firm's marginal tax rate is 32%. Calculate the cash flows associated with the project. Use a minus sign to indicate negative cash flows or decreases in cash, if required.
Year | Net Cash Flow |
0 | $ |
1 | $ |
2 | $ |
3 | $ |
4 | $ |
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