Question
Based on the following information, what is the relevant operating cash flow (OCF) associated with the project expected to be in year 3? The project
Based on the following information, what is the relevant operating cash flow (OCF) associated with the project expected to be in year 3? The project would require an initial investment in equipment of $170,000 that would be depreciated using MACRS where the depreciation rates in years 1, 2, 3, and 4 are 43%, 34%, 18%, and 5%, respectively. At the end of the project in 3 years, the equipment would be sold for an expected after-tax cash flow of $9,800. In year 3 of the project, relevant revenue associated with the project would be $167,000 and relevant costs associated with the project would be $124,000. The tax rate is 40 percent.
the answer is not 48920
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