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Pet & Company is considering launching a six - year long project that involves manufacturing glow - in - the - dark dog leashes. Pet
Pet & Company is considering launching a sixyear long project that involves manufacturing glowinthedark dog leashes. Pet & Company is a relatively large company with annual income that puts it in the percent income tax rate bracket. If the glowinthedark dog leashes sell as well as expected, the company will be seeing $ coming in each year in sales revenues. A total of $ would be paid each year for production costs that include supplies, electricity bills, hourly wages, and other expenses. To launch this project, $ would need to be spent right away to cover the cost of buying specialized production equipment and tools, and those will be losing their economic value based on the MACRS system for the fiveyear property class.
Economic value lost in each year is: percent during the first year, percent during the second year, percent during the third year, percent in years and percent in year six.
During the third year of the sixyear project, the operating cash flow is estimated at
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