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Taylor United is considering overhauling its equipment to meet increased demand for its product. The cost of equipment overhaul is $3.91 million, plus $239,396.00 in
Taylor United is considering overhauling its equipment to meet increased demand for its product. The cost of equipment overhaul is $3.91 million, plus $239,396.00 in installation costs. The firm will straight-line depreciate the equipment to zero using a 5-year recovery period. Additional sales from the overhaul should amount to $204,048.00 per year, and additional operating expenses and other costs (excluding depreciation) will amount to 38.00% of the additional sales. The firm has an ordinary tax rate of 38.00%. What is the operating cash flow for year 1 of this project
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