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I am having trouble finding what year 3 will be. I realize it is the terminal year but am unsure what I am doing wrong.
I am having trouble finding what year 3 will be. I realize it is the terminal year but am unsure what I am doing wrong.
CADS. Incorporated, has spent $400,000 on research to develop a new computer game. The firm is planning to spend $200,000 on a nachine to produce the new game. Shipping and installation costs of the machine will be capitalized and depreciated using bonus depreciation', they total $50,000. The machine has an expected iffe of three years, a $75,000 estimated resale value, and falls under the MACRS seven year class iffe. Revenue from the new game is expected to be $600,000 per year, with costs of $2,50,000 per yeat. The firm has a tax rate of 21 percent. has an opportunity cost of capital of 15 percent, and expects net working capital to increase by $100,000 at the beginning of the project. What will the cash flows for this project be? Note: Negotive omounts should be indicoted by o minus sign. Round your answers to 2 decimal pleces Step by Step Solution
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