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Your new employer, Freeman Software, is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax
Your new employer, Freeman Software, is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life, and the allowed depreciation rates for such property are 33.33%, 44.45%, 14.81%, and 7.41% for Years 1 through 4. Revenues and other operating costs are expected to be constant over the project's 10-year expected life. What is the Year 1 cash flow? Equipment cost (depreciable basis) Sales revenues, each year Operating costs (excl. deprec.) $65,000 $60,000 $25,000 Tax rate 25.0% a. $33,442 b. $36,869 C. $31,666 d. $31,849 e $35.114
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