Question
Your firm is evaluating a project that will run for the next five years, using straight-line depreciation (MACRS not allowed for this one). You have
Your firm is evaluating a project that will run for the next five years, using straight-line depreciation (MACRS not allowed for this one). You have been provided with an estimate of $260,000 in annual changes to EBITDA and an $80,000 annual increase in taxes that would occur if this project were undertaken. Your firm's tax rate is 40%. Your best estimate of the OCF (operating cash flows) that you would utilize in evaluating the project is...
$292,000 | ||
$260,000 | ||
$228,000 | ||
$180,000 | ||
$108,000 | ||
None of the above (or the answer cannot be determined with the information provided) |
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