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Pepsi Co. just started a 6-year project that costs $245,000 to purchase an equipment. The equipment will be depreciated following the 5-year MACRS schedule. According
Pepsi Co. just started a 6-year project that costs $245,000 to purchase an equipment. The equipment will be depreciated following the 5-year MACRS schedule. According to the 5-year MACRS schedule, the depreciation percentage each year from year 1 to year 6 is 20%, 32%, 19.2%, 11.52%, 11.52%, and 5,76%, respectively. The sales generated from the project will be $204,000 every year. The costs associated with the project will be $126,000 every year. The tax rate is equal to 40%. Calculate the project's operating cash flow in Year 2.
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