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The financial staff of Fe rag Itealaich Inc has identified the following information for the first year of the roll - out of its new

The financial staff of Ferag Itealaich Inc has identified the following information for the first year of the roll-out of its new proposed service:
Projected sales $18 million
Operating costs (not including depreciation) $9 million
Depreciation $4 million
Interest expense $3 million
The company faces a 25% tax rate. What is the projects cash flow for the first year?
The answer choices are
a.
$1.25 million
b.
$7.75 million
c.
$3.75 million
d.
$5.25 million

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