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Please help me please i will give good rating (c) May Corporation Holdings has spent $400,000 on research to develop a new computer game. The
Please help me please i will give good rating
(c) May Corporation Holdings has spent $400,000 on research to develop a new computer game. The firm is planning to spend $200,000 on a machine to produce the new game. Shipping and installation costs of the machine will be capitalized $50,000 and depreciated using the straight-line depreciation method. The machine has an expected life of three years, a $75,000 estimated resale value. Revenue from the new game is expected to be $600,000 per year, with costs of $250,000 per year. The firm has a tax rate of 21 percent and it expects net working capital to increase by $100,000 at the beginning of the project. Prepare the cash flows for this projectStep by Step Solution
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