A proposed project that will generate annual sales $36,960. The annual fixed costs are $12,700 and the variable costs are $9996. The project requires an upfront investment of $28,000 for fixed assets that will be depreciated on a straight-line basis to a zero book value over the four-yea ife of the project. The salvage value of the fixed assets is $6,900 and the FOx rate is 34 nercent What is the operating cash flow for year 4?
A proposed project that will generate annual sales $36,960. The annual fixed costs are $12,700 and the variable costs are $9996. The project requires an upfront investment of $28,000 for fixed assets that will be depreciated on a straight-line basis to a zero book value over the four-yea ife of the project. The salvage value of the fixed assets is $6,900 and the FOx rate is 34 nercent What is the operating cash flow for year 4?
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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Transcribed Image Text:A proposed project that will generate annual sales $36,960. The annual
fixed costs are $12,700 and the variable costs are $9996. The project
requires an upfront investment of $28,000 for fixed assets that will be
depreciated on a straight-line basis to a zero book value over the four-year
life of the project. The salvage value of the fixed assets is $6,900 and the
tax rate is 34 percent. What is the operating cash flow for year 4?
O $12,417
O $16,348
O $14,258
O $11,794
O $16,971
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