Laurel's Lawn Care, Ltd., has a new mower line that can generate revenues of $120,000 per year.
Question:
Laurel's Lawn Care, Ltd., has a new mower line that can generate revenues of $120,000 per year. Direct production costs are $40,000, and the fixed costs of maintaining the lawn mower factory are $15,000 a year. The factory originally cost $1 million and is being depreciated for tax purposes over 25 years using straight-line depreciation. Calculate the operating cash flows of the project if the firm's tax bracket is 35%.
Transcribed Image Text:
S 120,000.00 40,000.00 15,000.00 Revenues Direct production costs Fixed costs Factory originally cost Depreciated over Tax rate 1.00 million 25.00 years 35.0000
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Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0078034640
7th edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus
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