ABC Company is considering a new investment. Initially, this project requires a new fixed asset, which...

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ABC Company is considering a new investment. Initially, this project requires a new fixed asset, which costs 5 million. The fixed asset will be depreciated straight line to zero over its five-year tax life, after which it will be worthless. Financial projections for the investment are tabulated in the following table. The corporate tax rate is 30%. Assume all sales revenue is received in cash, all operating costs and income taxes are also paid in cash, and all cash flows occur at the end of the year . All net working capital is recovered at the end of the project ( in $ 000) (1). Compute the net income of the investment for each year. ABC Company is considering a new investment. Initially, this project requires a new fixed asset, which costs 5 million. The fixed asset will be depreciated straight line to zero over its five-year tax life, after which it will be worthless. Financial projections for the investment are tabulated in the following table. The corporate tax rate is 30%. Assume all sales revenue is received in cash, all operating costs and income taxes are also paid in cash, and all cash flows occur at the end of the year . All net working capital is recovered at the end of the project ( in $ 000) (1). Compute the net income of the investment for each year.

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