Using Excel (if applicable),

Amaco is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life according to MACRS and depreciation rates for such equipment are 33%, 45%, 15%, and 7% for Years 1 through 4, respectively. Revenues and other operating costs are expected to be constant over the project's 10-year expected life. What is the Year 2 cash flow?

Equipment cost (depreciable basis)	$100,000
Sales revenues, each year	$60,000
Operating costs (excl. depreciation)	$25,000
Interest expense Tax rate	$4,000 20%