Question
For a new project, a company plans to invest $15,000 in inventory, $8,000 in accounts receivable and $150,000 in fixed assets with a salvage value
For a new project, a company plans to invest $15,000 in inventory, $8,000 in accounts receivable and $150,000 in fixed assets with a salvage value of $44,001. Accounts payable will increase by $13,000 when the project starts. Assets are depreciated straight line to zero over the 4-year life of the project. Tax rate is 35%. Which one of the following statements is correct concerning the cash flow in year 4? options: $8,000 is a cash inflow from accounts receivable. $13,000 is a cash inflow from accounts payable. The net salvage value is a cash outflow. $15,000 is a cash outflow from inventory. The cash flow from the salvage value is equal to $44,000 multiplied by 35%.
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