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Lendrum Inc. is considering a new project whose data are shown below. The equipment has an economic life of 3 years, and is in CCA class 10 (30%). The half- year rule applies. Revenues and cash operating costs are expected to be constant over the project's 3-year life. What is the net operating cash flow for Year 1? Equipment cost $80,000 Annual sales revenues $60,000 Annual cash operating costs $35,000 Tax rate 25.0% O a. $13,000 O b. $9,750 O c. $21,750 O d. $25,000 AGE

Lendrum Inc. is considering a new project whose data are shown below. The equipment has an economic life of 3 years, and is in CCA class 10 (30%). The half- year rule applies. Revenues and cash operating costs are expected to be constant over the project's 3-year life. What is the net operating cash flow for Year 1? Equipment cost $80,000 Annual sales revenues $60,000 Annual cash operating costs $35,000 Tax rate 25.0% O a. $13,000 O b. $9,750 O c. $21,750 O d. $25,000 AGE

Essentials Of Investments
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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Lendrum Inc. is considering a new project whose data are shown below. The equipment has an economic life of 3 years, and is in CCA class 10 (30%). The half- year rule applies. Revenues and cash operating costs are expected to be constant over the project's 3-year life. What is the net operating cash flow for Year 1? Equipment cost $80,000 Annual sales revenues $60,000 Annual cash operating costs $35,000 Tax rate 25.0% O a. $13,000 O b. $9,750 O c. $21,750 O d. $25,000 AGE
Transcribed Image Text:Lendrum Inc. is considering a new project whose data are shown below. The equipment has an economic life of 3 years, and is in CCA class 10 (30%). The half- year rule applies. Revenues and cash operating costs are expected to be constant over the project's 3-year life. What is the net operating cash flow for Year 1? Equipment cost $80,000 Annual sales revenues $60,000 Annual cash operating costs $35,000 Tax rate 25.0% O a. $13,000 O b. $9,750 O c. $21,750 O d. $25,000 AGE
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