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Please do it in 10 minutes will upvote 2. XYZ operates indoor tracks. The firm is evaluating the Santa Fe project, which would involve opening
Please do it in 10 minutes will upvote
2. XYZ operates indoor tracks. The firm is evaluating the Santa Fe project, which would involve opening a new indoor track in Santa Fe. During year 1, XYZ would have total revenue of $164,000 and total costs of $75,700 if it pursues the Santa Fe project, and the firm would have total revenue of $153,000 and total costs of $72,300 if it does not pursue the Santa Fe project. Depreciation taken by the firm would be $77,500 if the firm pursues the project and $36,300 if the firm does not pursue the project. The tax rate is 45.90%. What is the relevant operating cash flow (OCF) for year 1 of the Santa Fe project that XYZ should use in its NPV analysis of the Santa Fe project? 3Step by Step Solution
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