Question
The Lumber Yard is considering adding a new product line that is expected to increase annual sales by $220,000 and cash expenses by $136,000. The
The Lumber Yard is considering adding a new product line that is expected to increase annual sales by $220,000 and cash expenses by $136,000. The initial investment will require $100,000 in fixed assets that will be depreciated using the 5-year MACRS. The company has a marginal tax rate of 38 percent. What is the project OCF in year 2? (Do not include the dollar sign ($). 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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Cost Accounting Foundations and Evolutions
Authors: Michael R. Kinney, Cecily A. Raiborn
8th Edition
9781439044612, 1439044619, 978-1111626822
