Question
Shiny Fish Co. is thinking of importing lobsters to sell to restaurants and specialty stores. Shiny Co. estimates that this venture will require an initial
Shiny Fish Co. is thinking of importing lobsters to sell to restaurants and specialty stores. Shiny Co. estimates that this venture will require an initial outlay of RM200,000 to buy a refrigerated storage unit that can be depreciated (straight line) to a salvage value of RM20,000 in eight years. In addition, she estimates that she will need RM25,000 in working capital during the eight years of the project. Annual sales are estimated to be RM100,000 and annual expenses RM50,000. Marginal tax rate is 20 percent. What will be the terminal cash flow in year 8?
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