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HELP ASAPPP (Estimated time allowance: 11 minutes) The CEO of 3Rios Corp. is considering undertaking a project that has estimated sales of $54 million a
HELP ASAPPP
(Estimated time allowance: 11 minutes) The CEO of 3Rios Corp. is considering undertaking a project that has estimated sales of $54 million a year. The variable production costs are 71% of sales. Cash fixed costs are $5.7 million a year. The project lasts 10 years. The equipment needed for the project costs $57 million and will be depreciated using MACRS method and has a 5-year MACRS classification (table below). There are no other costs. The tax rate is 26%. Year 3-Year 5-Year 7-Year 10-Year 1 33.33%20.00% 14.29% 10.00% 2 44.45%32.00%24.49%18.00% 3 14.81%19.20% 17.49%14.40% 4 7.41% 11.52% 12.49%11.52% 5 11.52%8.93% 9.22% 6 5.76% 8.93% 7.37% 7 8.93% 6.55% 8 4.45% 6.55% 9 6.56% 10 6.55% 11 3.28% 12 What is operating cash flow (in millions) for year 6? Chara Step by Step Solution
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