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QUESTION 7 What Is the operating cash flow for year 4 of project 5 that Club Corp should use In Its NV analysis of the

QUESTION 7What Is the operating cash flow for year 4 of project 5 that Club Corp should use In Its NV analysis of the project? The tax rate is 40%. During year 4, project 5 Is expected to have relevant revenue of $164,000, relevant variable costs of $85,000, and relevant depredation of $31,000. In addition, Club Corp would have one source of fixed costs assocated with project S. Yesterday, Club Corp signed a deal with Lounge Legal to develop a liability control plan. The terms of the deal require Club Corp to pay Lounge Legal ether $27,000 In 4 years If project S Is pursued or $39,000 In 4 years If project 5 is not pursued. Finally, the equipment purchased for the project would be sold in 4 years for an expected after-tax cash flow of $6,000.O $64,600(plus or minus $5.00)O $66,400(plus or minus $5.00) None of the other alternatives are within $5.00 of the correct answerO $65,200(plus or minus $5.00)O $67,000(plus or minus $5.00)

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