A 7-year project is expected to provide annual sales of $221,000 with costs of $97,500. The equipment necessary for the project will cost $360,000 am will be depreciated on a straight-line method over the life of the project. You feel that both sales and costs are accurate to +/-15 percent. The tax rate im 21 percent. What is the annual operating cash flow for the worst-case scenario? Multiple Choice $129,329 $77,946 $70,623
A 7-year project is expected to provide annual sales of $221,000 with costs of $97,500. The equipment necessary for the project will cost $360,000 am will be depreciated on a straight-line method over the life of the project. You feel that both sales and costs are accurate to +/-15 percent. The tax rate im 21 percent. What is the annual operating cash flow for the worst-case scenario? Multiple Choice $129,329 $77,946 $70,623
Chapter9: Capital Budgeting And Cash Flow Analysis
Section: Chapter Questions
Problem 5P
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Question
Hh.27.
![A 7-year project is expected to provide annual sales of $221,000 with costs of $97,500. The equipment necessary for the project will cost $360,000 and
will be depreciated on a straight-line method over the life of the project. You feel that both sales and costs are accurate to +/-15 percent. The tax rate is
21 percent. What is the annual operating cash flow for the worst-case scenario?
Multiple Choice
$129,329
$77,946
$70,623
$49,221](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F71a6b9af-79cd-4d12-a858-098c897cdcbb%2F91efadd8-15ef-444c-9972-f8e2492c0153%2F2a86utlfn_processed.jpeg&w=3840&q=75)
Transcribed Image Text:A 7-year project is expected to provide annual sales of $221,000 with costs of $97,500. The equipment necessary for the project will cost $360,000 and
will be depreciated on a straight-line method over the life of the project. You feel that both sales and costs are accurate to +/-15 percent. The tax rate is
21 percent. What is the annual operating cash flow for the worst-case scenario?
Multiple Choice
$129,329
$77,946
$70,623
$49,221
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