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A project will cut firms operating costs by $50,000. The project requires an initial investment of $30,000 and be depreciated using straight-line depreciation to a
A project will cut firms operating costs by $50,000. The project requires an initial investment of $30,000 and be depreciated using straight-line depreciation to a zero book value over the 4-year life of the project. The company has a marginal tax rate of 35 percent. What is the operating cash flow of the project using the tax shield approach? a. $42,800 b. $35,125 c. $40,450 d. $38,930
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