7- In a 3-year capital project, cash revenues are expected to increase by 120,000 $ and cash operating costs will decrease by 50,000 $ per year. The asset acquired has a cash cost of 1,000,000 $ and the company applies accelerated depreciation method, where the useful life is 10 years. What are the total operating cash flows for the project? Note that tax rate is 30%.

1. 503,400 $
2. 485,400 $
3. 293,400 $
4. 126,600 $

8- In a capital project, an old machine, which was purchased at a cost of 600,000 $ 3 years ago. The machine has a scrap value of 50,000 $ and a useful life of 10 years. It will be sold now at a price of 300,000 $. The company applies straight-line depreciation method. Tax rate is 40%. What is the disposal cash flow?

1. 180,000 $
2. 48,000 $
3. 246,000 $
4. 252,000 $

Answer rating: 100% (QA)

1 a 503400 Year 1 2 3 Increase in cash revenue 12000... View the full answer