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XYZ is evaluating the Reno project. The project would require an initial investment of $134,000 that would be depreciated to $16,700 over 6 years
XYZ is evaluating the Reno project. The project would require an initial investment of $134,000 that would be depreciated to $16,700 over 6 years using straight-line depreciation. The project is expected to have operating cash flows of $46,500 per year forever. XYZ expects the project to have an after-tax terminal value of $320,000 in 3 years. The tax rate is 30%. What is (X+Y)/Z if X is the project's relevant expected cash flow in year 3, Y is the project's relevant expected cash flow in year 5, and Z is the project's relevant expected cash flow in year 2? OA number equal to or greater than 9.50 but less than 11.91 OA number equal to or greater than 13.61 but less than 15.45 OA number equal to or greater than 7.38 but less than 9.50 OA number less than 7.38 or a rate greater than 15.45 OA number equal to or greater than 11.91 but less than 13.61
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