Your company, RMU Inc., is considering a new project whose data are shown below. Under the new tax law, the equipment used in the project is eligible for 100% bonus depreciation, so it will be fully depreciated at t = 0. What is the project's Year 1 cash flow? Sales revenues $24,950 Operating costs $13,450 Tax rate 25.0%   a. $8,625     b. $14,375     c. $11,500     d. $5,263     e. $9,200

Essentials Of Investments
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Chapter1: Investments: Background And Issues
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Your company, RMU Inc., is considering a new project whose data are shown below. Under the new tax law, the equipment used in the project is eligible for 100% bonus depreciation, so it will be fully depreciated at t = 0. What is the project's Year 1 cash flow?

Sales revenues $24,950
Operating costs $13,450
Tax rate

25.0%

 

a. $8,625  
  b. $14,375  
  c. $11,500  
  d. $5,263  
  e. $9,200  
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