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KTS is trying to estimate the first-year operating cash flow. The financial staff has given you the following information: Incremental revenue = $8 Depreciation =

KTS is trying to estimate the first-year operating cash flow. The financial staff has given you the following information:

Incremental revenue = $8

Depreciation = $2

Interest Expense = $1

Marginal tax rate = 50%

What is the operating cash flow in year 1?

2.5

4.5

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