Your company, CSUS Inc., is considering a new project whose data are shown below. The required. equipment has a 3-year tax life, and the MACRS depreciation rates for such property are .33, .45, .15, and .07 for Years 1 through 4. Sales and operating costs are expected to be constant over the project's 10-year expected operating life. What is the project's Year 4 operating cash flow? Equipment cost (depreciable basis) $70,000 Sales revenues, each year $40,000 Decrease in sales of existing products $6,500 Operating costs (excl. depr.) $25,000 Tax rate 35.0% $5,864 $7,240 $7,312 $6.154 $8,398

Algebra and Trigonometry (6th Edition)
6th Edition
ISBN:9780134463216
Author:Robert F. Blitzer
Publisher:Robert F. Blitzer
ChapterP: Prerequisites: Fundamental Concepts Of Algebra
Section: Chapter Questions
Problem 1MCCP: In Exercises 1-25, simplify the given expression or perform the indicated operation (and simplify,...
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Your company, CSUS Inc., is considering a new project whose data are shown below. The required.
equipment has a 3-year tax life, and the MACRS depreciation rates for such property are .33, .45, .15, and
.07 for Years 1 through 4. Sales and operating costs are expected to be constant over the project's 10-year
expected operating life. What is the project's Year 4 operating cash flow?
Equipment cost (depreciable basis)
$70,000
Sales revenues, each year
$40,000
Decrease in sales of existing products
$6,500
Operating costs (excl. depr.)
$25,000
Tax rate
35.0%
$5,864
$7,240
$7,312
$6.154
$8,398
Transcribed Image Text:Your company, CSUS Inc., is considering a new project whose data are shown below. The required. equipment has a 3-year tax life, and the MACRS depreciation rates for such property are .33, .45, .15, and .07 for Years 1 through 4. Sales and operating costs are expected to be constant over the project's 10-year expected operating life. What is the project's Year 4 operating cash flow? Equipment cost (depreciable basis) $70,000 Sales revenues, each year $40,000 Decrease in sales of existing products $6,500 Operating costs (excl. depr.) $25,000 Tax rate 35.0% $5,864 $7,240 $7,312 $6.154 $8,398
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