A proposed five-year project will require $627,000 for fixed assets, $196,000 for inventory, and $ 34,000 for accounts receivable. Accounts payable are expected to increase by $156,000. The fixed assets will be depreciated straight-line to a zero book value over five years. At the end of the project, the fixed assets can be sold for $255,000. The net working capital returns to its original level at the end of the project. The operating cash flow per year is $62,000. The tax rate is 35 percent and the discount rate is 12 percent. What is the total cash flow in the final year of the project? Group of answer choices $389,530 $358,430 $365,788 $330,030 $301,750

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
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A proposed five-year project will require $627,000 for fixed assets, $196,000 for inventory, and $
34,000 for accounts receivable. Accounts payable are expected to increase by $156,000. The fixed
assets will be depreciated straight-line to a zero book value over five years. At the end of the project,
the fixed assets can be sold for $255,000. The net working capital returns to its original level at the
end of the project. The operating cash flow per year is $62,000. The tax rate is 35 percent and the
discount rate is 12 percent. What is the total cash flow in the final year of the project? Group of answer
choices $389,530 $358,430 $365, 788 $330,030 $301,750
Transcribed Image Text:A proposed five-year project will require $627,000 for fixed assets, $196,000 for inventory, and $ 34,000 for accounts receivable. Accounts payable are expected to increase by $156,000. The fixed assets will be depreciated straight-line to a zero book value over five years. At the end of the project, the fixed assets can be sold for $255,000. The net working capital returns to its original level at the end of the project. The operating cash flow per year is $62,000. The tax rate is 35 percent and the discount rate is 12 percent. What is the total cash flow in the final year of the project? Group of answer choices $389,530 $358,430 $365, 788 $330,030 $301,750
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