Question
Jack Software is considering a new project whose data are shown below.The equipment that would be used has a 3-year tax life, and the allowed
Jack Software is considering a new project whose data are shown below.The equipment that would be used has a 3-year tax life, and the allowed depreciation rates for such property are 33%, 45%, 15%, and 7% for Years 1 through 4.Revenues and other operating costs are expected to be constant over the project's 10-year expected life. Net working capital required is $5,000. What is the Year 3 cash flow?
Equipment cost (depreciable basis)$95,000
Sales revenues, each year$65,000
Operating costs (excl. deprec.)$30,000
Tax rate35%
how do i complete this?
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