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Compute Cash flows for the initial time-period (year 0) and the future four years of the project. - The firm is planning to spend $220,000
Compute Cash flows for the initial time-period (year 0) and the future four years of the project. - The firm is planning to spend $220,000 on a machine to produce the new game. Shipping and installation costs =$20,000. - The machine is depreciated using MACRS-5-year depreciation and has an ending salvage value of $30,000. - Revenue from the new game is expected to be $600,000 in the year 1 and 5% increase every year until year 4. - Operating cost =$250,000 in year 1 and are expected to increase by 5% each year until year 4 - The firm has a tax rate of 34 percent - It expects net working capital to be 10% of the next year's sales. The project lasts for four years. What are the cash flows of the project
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