ABC, Inc. purchased an equipment at time=0 for $84,362. The shipping and installation costs were $28,520. The equipment is classified as a 5-year MACRS property. The investment in net working capital at time=0 was $12,792 which would be recouped at the end of the project. The project life is three years. At the end of the third year, the company will sell the equipment for $25,478. The annual cash flows are $25,453. What is the cash flow of the project in Year 3? That is, solve for CF3. Assume that the tax rate is 13% The MACRS allowance percentages are as follows, starting with Year 1: 20.00, 32.00, 19.20, 11.52, 11.52, and 5.76 percent. Note: In the last year of the project, the Total Cash Flow = Operating Cash Flow + Terminal Cash Flow Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box.
ABC, Inc. purchased an equipment at time=0 for $84,362. The shipping and installation costs were $28,520. The equipment is classified as a 5-year MACRS property. The investment in net working capital at time=0 was $12,792 which would be recouped at the end of the project. The project life is three years. At the end of the third year, the company will sell the equipment for $25,478. The annual cash flows are $25,453. What is the cash flow of the project in Year 3? That is, solve for CF3. Assume that the tax rate is 13%
The MACRS allowance percentages are as follows, starting with Year 1: 20.00, 32.00, 19.20, 11.52, 11.52, and 5.76 percent.
Note: In the last year of the project, the Total Cash Flow = Operating Cash Flow + Terminal Cash Flow
Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box.
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