3.Clemson Software is considering a new project whose data are shown below. The required equipment has a 3-year tax life, after which it will be worthless, and it will be depreciated by the straight-line method over 3 years. Revenues and other operating costs are expected to be constant over the project's 3-year life. What is the project's Year 1 cash flow to the nearest dollar?

What is the project's Year 1 cash flow? Show work.

Equipment cost (depreciable basis) $80,000

Straight-line depreciation rate 33.333%

Sales revenues, each year $70,000

Operating costs (excl. deprec.) $40,000

Tax rate 35%

Question 3 options:

$28,833

$26,667

$27,892

$26,887

4.

Mellon Corp. is considering a project that costs costs $60,000 and would produce net cash flows of $25,000 for 5 years. What is Mellon's equivalent annual annuity to the nearest dollar?

Question 4 options:

	$30,125
	$9,042
	$7,998
	$8,355