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Hi I need help answer the following question thank you What is the cash flow from assets (project cash flow) in year ONE for this
Hi I need help answer the following question thank you
What is the cash flow from assets (project cash flow) in year ONE for this project? A firm is considering an expansion project that will last three years. The project requires an immediate purchase of a new equipment that costs $900,000. The equipment will be fully depreciated using straight-line method over the next three years. The resole price of the equipment at the end of year three is estimated to t $200,000. The project will generate annual sales of $750,000 and incur annual costs coll costs except depreciation expense) of $200,000 for each of the next three years. The project requires an immediate investment of $50.000 in NWC, which will be fully recovered in year 3. The corporate tax rate is 30% $125,000 5525.000 O $475.000 5725.000 Step by Step Solution
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