Question: Purple Construction is evaluating a 6 - year project that would require an initial investment in equipment of $ 5 3 3 , 0 0

Purple Construction is evaluating a 6-year project that would require an initial investment in equipment of $533,000. The equipment would be depreciated to $29,000 over 7 years using straight-line depreciation. In year 4, the project is expected to have relevant revenue of $395,000 and relevant variable costs of $291,000. In addition, Purple Construction would have one source of freed costs associated with the project. Yesterday, Purple Construction signed a deal with Island Design to develop an advertising campaign for the project. The terms of the deal require Purple Construction to pay Island Design either $64,000 in 4 years if the project is pursued or $43,000 in 4 years if the project is not pursued. The tax rate is 40 percent. What is the operating cash flow for year 4 that Purple Construction should use in its NPV analysis of the project?
Input instructions: Round your answer to the nearest dollar.
dollars
Purple Construction is evaluating a 6 - year

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