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Clemson Software is considering a new project whose data are shown below. The required equipment has a 3-year tax life, after which it will be
Clemson Software is considering a new project whose data are shown below. The required equipment has a 3-year tax life, after which it will be worthless, and it will be depreciated by the straight-line method over 3 years. Revenues and other operating costs are expected to be constant over the project's 3-year life. What is the project's Year 1 cash flow? Do not round the intermediate calculations and round the final answer to the nearest whole number.
Equipment cost (depreciable basis) | $78,000 |
Straight-line depreciation rate | 33.333% |
Sales revenues, each year | $60,000 |
Operating costs (excl. depr.) | $25,000 |
Tax rate | 35.0% |
Question 4 options:
| $33,124 |
| $25,480 |
| $29,302 |
| $34,080 |
| $31,850 |
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