Question
The Lumber Yard is considering adding a new product line that is expected to increase annual sales by $237,000 and cash expenses by $142,000. The
The Lumber Yard is considering adding a new product line that is expected to increase annual sales by $237,000 and cash expenses by $142,000. The initial investment will require $105,000 in fixed assets that will be depreciated using the 5-year MACRS. The company has a marginal tax rate of 32 percent. What is the project OCF in year 2? (Do not include the dollar sign ($). Round your answer to a whole dollar. (e.g., 4,132)
| MACRS 5-year property | |
| Year | Rate |
| 1 | 20.00% |
| 2 | 32.00% |
| 3 | 19.20% |
| 4 | 11.52% |
| 5 | 11.52% |
| 6 | 5.76% |
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The Making Of Finance
Authors: Isabelle Chambost, Marc Lenglet, Yamina Tadjeddine
1st Edition
1138498572, 978-1138498570
