Fool Proof Software is considering a new project whose data are shown below. The equipment that would

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Fool Proof Software is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life, and the allowed depreciation rates for such property are 33%, 45%, 15%, and 7% for Years 1 through 4. Revenues and other operating costs are expected to be constant over the project's 10-year expected life. What is the Year 1 cash flow?

Equipment cost (depreciable basis) ……….       $48,000

Sales revenues, each year ……………………….      $60,000

Operating costs (excl. depr.) ……………………      $25,000

Tax rate ………………………………..........………….           35.0%

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Related Book For  book-img-for-question

Cost Management Measuring Monitoring And Motivating Performance

ISBN: 392

2nd Edition

Authors: Leslie G. Eldenburg, Susan K. Wolcott

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