Question
Consider the following facts about a company's new product: Anticipated incremental annual revenues $300,000 Anticipated incremental annual costs $100,000 Research and development spent previous year
Consider the following facts about a company's new product:
| Anticipated incremental annual revenues | $300,000 |
| Anticipated incremental annual costs | $100,000 |
| Research and development spent previous year | $200,000 |
| Purchase of equipment to produce product | $34,141 |
| Shipping and installation of production equipment | $5,000 |
| Estimated resale value of equipment in three years | $25,000 |
| Expected useful life | 3 years |
| MACRS classification | 5-year |
| Marginal tax rate | 39% |
| Project cost of capital | 14% |
What is the net cash flow for the first year of operations for this product?
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Financial And Insurance Formulas
Authors: Tomas Cipra
2010th Edition
3790829013, 978-3790829013
