Question 20)

Middlefield Motors is evaluating project Z. The project would require an initial investment of 73,500 dollars that would be depreciated to 14,000 dollars over 7 years using straight-line depreciation. The first annual operating cash flow of 12,500 dollars is expected in 1 year, and annual operating cash flows of 12,500 dollars are expected each year forever. Middlefield Motors expects the project to have an after-tax terminal value of 277,000 dollars in 3 years. The tax rate is 10 percent. What is (X+Y)/Z if X is the projects relevant expected cash flow for NPV analysis in year 3, Y is the projects relevant expected cash flow for NPV analysis in year 4, and Z is the projects relevant expected cash flow for NPV analysis in year 2? Round your answer to 2 decimal places (for example, 2.89, 0.70, or 1.00).