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A proposed expansion project is expected to increase sales of JP Outlet by $56,000 and increase cash expenses by $22,000. The project will cost $28,000
A proposed expansion project is expected to increase sales of JP Outlet by $56,000 and increase cash expenses by $22,000. The project will cost $28,000 and be depreciated using straight-line depreciation to a zero book value over the 4-year life of the project. The store has a marginal tax rate of 40 percent. What is the operating cash flow of the project using the tax shield approach?
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