Question
Jimbos Demolotion Service has a wrecking ball apparatus that it purchased 3 years ago for $100,000. It is currently being used in a project that
Jimbos Demolotion Service has a wrecking ball apparatus that it purchased 3 years ago for $100,000. It is currently being used in a project that is in the final year of its 3 year lifespan that started the year the wrecking ball was purchased. The company plans to depreciate the wrecking ball straight-line to zero over its anticipated 5 year life. However, a competitor has made an offer to but the wrecking ball from the company at the end of the project (the end of Year 3) for $60,000. The company has accepted the offer. Assuming a 21% tax rate, no recovery of Net Working Capital at the end of the project, no other sales of equipment at the end of the project, and annual Operating Cash Flow of $400,000.
Question 38: What is the amount of the Total Cash Flow for Year 3 of the project?
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$447,900
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$460,000
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$410,000
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$352,100
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$452,100
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