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Lenny's Pizzeria is purchasing a new brick pizza oven for $20,000. It will be depreciated in a straight line to zero over 5 years. It
Lenny's Pizzeria is purchasing a new brick pizza oven for $20,000. It will be depreciated in a straight line to zero over 5 years. It will increase the pizzeria's sales by $10,000 each year but will also lead to higher cash expenses of $2,000 each year. The firm faces a corporate tax rate of 21% and the project has an opportunity cost of capital of 10%. What are the project's operating cash flows (OCF) in the first year of operation? Multiple Choice $3,160 $6,320 $7,160 $4,000
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