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what is the bet investment for the project? what are the bet cash flows for year 4? The Space Mountain Company currently has annual cash
what is the bet investment for the project?
The Space Mountain Company currently has annual cash revenues of $1.6 million and annual cash expenses of $800,000. Depreciation amounts to $180,000 per year. The firm's marginal tax rate is 40 percent. A new high-speed roller coaster costing $1.15 million is being considered as a potential investment. This new piece of equipment will have an estimated usable life of 12 years and $0 estimated salvage value. If the new coaster is bought, Space Mountain's annual revenues are expected to increase to $1.75 million and annual expenses (exclusive of depreciation) will increase to $900,000. Annual depreciation will be $240,000. Assume that no increase in net working capital will be required. What are the Net Cash Flows for Year 4 what are the bet cash flows for year 4?
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