Question
Use the following information for the next 4 questions. Fiduciary Responsible Tees Corp. is considering launching a new clothing line. The project would require a
Use the following information for the next 4 questions. Fiduciary Responsible Tees Corp. is considering launching a new clothing line. The project would require a $5,763,489 capital investment and will be depreciated (straight-line to zero) over its 4-year life. The company discovers at the end of the project that it will be able to sell the equipment for $3,611,742 (salvage value). Incremental sales are expected to be $16,003,799 annually for the 4-year period with costs (excluding depreciation) of 64% of sales. The project would also require the company to increase inventory levels by $1,495,912. The company has a 21% tax rate.
What is the project cash flow (cash flow from assets) for Year 4?
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