Question
XYZ is evaluating the Reno project. The project would require an initial Investment of $137,000 that would be depreciated to $15,200 over 6 years using
XYZ is evaluating the Reno project. The project would require an initial Investment of $137,000 that would be depreciated to $15,200 over 6 years using straight-line depreciation. The project is expected to have operating cash flows of $49,600 per year forever. XYZ expects the project to have an after-tax terminal value of $362.000 in 3 years. The tax fate is 30%. What Is OX+VV/ZIXis the projects relevant expected cash flow in year 3, Y is the project's relevant expected cash flow in year 4, and Z is the project's relevant expected cash flow in year 27 A number equal to or greater than 7.80 but less than 9.83 O A number equal to or greater than 11.71 but less than 12.88 O A number equal to or greater than 9.83 but less than 11.71 O A number equal to or greater than 12.88 but less than 14.53 O A number less than 7.80 or a rate greater than 14.53
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