Question
Auto Restoration just purchased some equipment at a cost of $1.2 million that will be depreciated using 7-year MACRS. The MACRS depreciation factors are .1429,
Auto Restoration just purchased some equipment at a cost of $1.2 million that will be depreciated using 7-year MACRS. The MACRS depreciation factors are .1429, .2449, .1749, .1249, .0893, .0892, .0893, .0446, over eight years, respectively. Sales are estimated at 200, 500, 650, 400, and 300 units over the next five years, respectively. The selling price is $5,500 per unit and the cost estimate is $4,200 per unit. The tax rate is 35 percent. What is the cash flow from operations for Year 2?
Group of answer choices
$422,522
$231,478
$487,500
$387,500
$525,358
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