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10s.2 Consider the following financial data for an investment project: · Required capital investment at n = 0 : $100,000 • Project service life: 10 years • Salvage value at n = 10 : $15,000 · Annual revenue: $150,000 · Annual O&M costs (not including depreciation): $50,000 • Depreciation method for tax purpose: seven-year MACRS • Income tax rate: 25%. Determine the project cash flow at the end of year 10. a. $86,250 b. $73,000 c. $75,000 d. $67,000

10s.2 Consider the following financial data for an investment project: · Required capital investment at n = 0 : $100,000 • Project service life: 10 years • Salvage value at n = 10 : $15,000 · Annual revenue: $150,000 · Annual O&M costs (not including depreciation): $50,000 • Depreciation method for tax purpose: seven-year MACRS • Income tax rate: 25%. Determine the project cash flow at the end of year 10. a. $86,250 b. $73,000 c. $75,000 d. $67,000

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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10s.2 Consider the following financial data for an investment project: - Required capital investment at n = 0 : $100,000 · Project service life: 10 years • Salvage value at n = 10 : $15,000 · Annual revenue: $150,000 · Annual O&M costs (not including depreciation): $50,000 · Depreciation method for tax purpose: seven-year MACRS - Income tax rate: 25%. Determine the project cash flow at the end of year 10. a. $86,250 b. $73,000 c. $75,000 d. $67,000
Transcribed Image Text:10s.2 Consider the following financial data for an investment project: - Required capital investment at n = 0 : $100,000 · Project service life: 10 years • Salvage value at n = 10 : $15,000 · Annual revenue: $150,000 · Annual O&M costs (not including depreciation): $50,000 · Depreciation method for tax purpose: seven-year MACRS - Income tax rate: 25%. Determine the project cash flow at the end of year 10. a. $86,250 b. $73,000 c. $75,000 d. $67,000
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