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Question 4: You are looking to invest $150,000 in some small manufacturing equipment to augment your present production capabilities. The equipment is to be depreciated
Question 4: You are looking to invest $150,000 in some small manufacturing equipment to augment your present production capabilities. The equipment is to be depreciated according to a 3-year class (MACRS-3). You estimate that you will be able to salvage the equipment for $35,000 in five years time. You estimate that the investment will generate following additional revenues, COGS and Operating expenses: Revenues COGS 540,000.00 $538,380.00 5542,110.50 $543,618.90 $539,330.40 $340,200.00 $333,795.60 $346,950.72 $342,479.91 $334,384.85 6,357.00 Costs 89.00 345.00 82,789.00 453.00 Business ordinary tax rate is 29%. You take a loan for the entire $150,000 at 6% interest rate over 5 years. 1. 2. Develop the Deprecation Table and Amortization Table Calculate the: a. Net Income for the project (Income Statement) b. Following cash flows for the project: i. Operating Cash Flows ii. Investing Cash Flows ii. Financing Cash Flows iv. Net Cash Flow
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