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A project requires the purchase of $587000 of equipment that will be depreclated straight-line to a zero book value over the four-year life of the
A project requires the purchase of $587000 of equipment that will be depreclated straight-line to a zero book value over the four-year life of the project. The equipment can be scraped at the end of the project for 33 percent of its original cost. Annual sales from this project are estlmated at $625,000 with cash expenses of $487000. Net working capltal equal to 12 percent of sales will be required to support the project. The required return is 13 percent and the tax rate is 21 percent. What is the cash flow in Year 2 of the project? ignore bonus depreclation. Multiple Choice $91.080 -$55.670 $139.838 $105,560 -$5.775
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