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The startup costs of a project is $500,000. For years 1 through 5, the annual revenues are expected to be $210,000, and the annual costs
The startup costs of a project is $500,000. For years 1 through 5, the annual revenues are expected to be $210,000, and the annual costs are expected to be $110,000 per year. The firm faces a tax rate of 40%.
Based on the above information, what is the cash flow in year 3?
A. $60,000
B. $40,000
C. $100,000
D. -$40,000
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