Question
What is the project cash flow in year 4 for this project? A project requires buying some fixed assets that cost $40,000 immediately. These fixed
What is the project cash flow in year 4 for this project?
A project requires buying some fixed assets that cost $40,000 immediately. These fixed assets will be depreciated straight-line to zero over its 4-year life. The project also requires a net working capital investment of $5,000 up front. The investment in NWC will recovered fully at the end of the life of the project. The project generates OCF of $17,000 each of the next three years, and the fixed assets will be sold for $7,000 after the four years. Assume that the tax rate for the firm is 34%.
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