7) what is the Incremental cash flow for this project? a) $79,000 b) 64,000 c)$100,000 d) 60,000 e) 76,000

question: what is the Incremental net capital spending for this project? a) $193,500 b) 169,500 c) 118,500 d) 182,500 e) 300,000

Consider the following information for questions 7 and 8 ABC Co. is considering replacing an old power generator with a new one. The old one was purchased 5 years ago for $200,000. It is depreciated strait-line to zero over its 10-year life. It is expected to be worthless at the end of its 10-year life. If ABC sells it today, ABC should receive $110,000 for the generator. The new generator costs $300,000. It has a life of 5 years and will be depreciated strait-line to zero over its 5-year life. It is expected to be worth $20,000 at the end of its 5-year life. The new generator is expected to reduce the operating costs by $100,000 per year. There is no change in net working capital. The discount rate of this replacement project is 15%, and the tax rate is 35%. What is the incremental operating cash flow for this project? 0 i e a 1994