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A proposed investment has an equipment cost of $1,400. It will have a life of 2 years. The cost will be depreciated straight-line to a
A proposed investment has an equipment cost of $1,400. It will have a life of 2 years. The cost will be depreciated straight-line to a zero-salvage value. Sales will be $4,250 per year, variable costs will run $420 per year, and fixed cost $130 per year. The firm will also need to invest $780 in net working capital. The corporate marginal tax rate is 33% while the average tax rate is 30%. What are the cash flows from assets (CFFA) for this project?
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