ABC, Inc. is considering a new project requiring a $210,000 initial investment in equipment having a useful life of 3 years with zero expected salvage value. The investment will produce $160,000 in annual revenues and $120,000 in annual costs. Assume a tax rate of 30% and straight-line depreciation. What is the operating cash flow per year? O $19,000 O $49,000 O $77,000 O $61,000 O $98,000
ABC, Inc. is considering a new project requiring a $210,000 initial investment in equipment having a useful life of 3 years with zero expected salvage value. The investment will produce $160,000 in annual revenues and $120,000 in annual costs. Assume a tax rate of 30% and straight-line depreciation. What is the operating cash flow per year? O $19,000 O $49,000 O $77,000 O $61,000 O $98,000
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
Problem 1PS
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Transcribed Image Text:ABC, Inc. is considering a new project requiring a $210,000 initial investment in equipment having a useful life
of 3 years with zero expected salvage value. The investment will produce $160,000 in annual revenues and
$120,000 in annual costs. Assume a tax rate of 30% and straight-line depreciation. What is the operating cash
flow per year?
O $19,000
O $49,000
O $77,000
O $61,000
O $98,000
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