This year, revenues from gym memberships were $20,000. Memberships have been growing 6% per year, which is expected to continue into the future. However, the new televisions are expected to increase membership growth to 8% per year. Moreover, advertising time will be sold on the televisions for a total $10,000 a year. The televisions can be depreciated using straight-line depreciation for 5 years with no resale value. Use a 21% tax rate. What is the incremental cash flow for the first year of the project?

Answer rating: 100% (QA)

Ineroamental Cohflows Year 1 Imreomentol revenue 21600 Fixedcoteadvetiuing Increamenta... View the full answer