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PERIOD 0 1 2 3 4 EBIT $46000 $57000 $70000 $80000 The above table illustrates earnings before interest and taxes for a capital investment project.

PERIOD 0 1 2 3 4
EBIT $46000 $57000 $70000 $80000

The above table illustrates earnings before interest and taxes for a capital investment project. Additional information for this project:

  • initial cost of the investment = $600,000
  • no change in net working capital
  • tax rate = 32.0%
  • depreciation = accelerated using the MACRS factors: 0.33330, 0.44450, 0.1481, 0.0741
  • projected cash flow from salvage = $0
  • projected erosion costs = $30,000 in Year 1 and $40,000 in Year 2

What is projected operating cash flow for Year 4?

What is the projected depreciation for Year 3?

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