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Your firm's sales this year are $500,000 and operating expenses are $400,000. A new project is expected to increase sales by 10% and decrease operating
Your firm's sales this year are $500,000 and operating expenses are $400,000. A new project is expected to increase sales by 10% and decrease operating expenses by 10%. The equipment will cost $50,000 and be depreciated using 100% bonus depreciation in Year 1. Interest expense is $500 per year. The company has a marginal tax rate of 21%. What is the operating cash flow of the project in Year 1? $81,205 $18,005 $18,400 $81,600 $792,600
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