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Adding a game room to Hopedale Lodge is expected to increase the lodge's sales revenues by $100,000 annually, increase its cash expenses by $45,000 annually,
Adding a game room to Hopedale Lodge is expected to increase the lodge's sales revenues by $100,000 annually, increase its cash expenses by $45,000 annually, and increase its depreciation by $30,000 annually. The project has an expected economic life of seven years. What is the net cash flow each year? Use the 40% for the effective tax rate. Assume there is no working capital to be liquidated at the end of the seven years, and that there is no salvage value at the end of seven years.
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