Question: ABC, Inc. is considering a new project requiring a $150,000 initial investment in equipment having a useful life of 3 years with zero expected salvage

ABC, Inc. is considering a new project requiring a $150,000 initial investment in equipment having a useful life of 3 years with zero expected salvage value. The investment will produce $100,000 in annual revenues and $60,000 in annual costs. Assume a tax rate of 30% and straight-line depreciation. What is the operating cash flow per year?

$25,000 $33,000 $43,000 $55,000 $78,000

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