Olafs Pizza Company is considering adding more dining space to its already successful restaurant. The owner, Kristoff, has determined that the new dining space will add $100,000 per year in additional sales. The expenses on the expansion will be 45% of the new sales. As part of the expansion, additional cooking equipment will be purchased with an installed cost of $30,000. The equipment will be depreciated using a 7-year MACRS schedule. The tax rate facing the firm is 35%.

What is the project cash flow for year 1 of the project?

$40.500.45
	$37,750.60
	$41,000.60
	$37,250.45
	$30,750