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Sleep Comfort Corp. is considering a new product: the Ejector Bed. The Ejector Bed allows either person (left or right) to eject the other person off of the bed at the touch of a button. The production equipment and facilities will cost $500 million. The production equipment is 15-year property with depreciation rates of 5% and 9.5% in the first two years. The project will last two years by which time the equipment and facilities will be sold for $150 million. Earnings before interest, taxes, and depreciation are forecast to be $400 million in both years. The marginal tax rate is 35%. What is the operating cash flow in the first year (including the depreciation tax shield)? Answer in millions of dollars and round to the nearest million. $MStep by Step Solution
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