Question: ABC Inc. is considering a new project whose data are shown below. The required equipment is categorized into the MACRS 3 -year class, and the
ABC Inc. is considering a new project whose data are shown below. The required equipment is categorized into the MACRS 3 -year class, and the accelerated rates for such property are 33.0%,45.0%,15.0%, and 7.0% for Years 1 through 4. Savings in pre-tax labor costs and other operating costs are expected to be constant over the project's 10year expected operating life. What is the project's Year 4 operating cash flow? Hint: Depr. Exp. in a given year = depreciable basis*that year's depreciation rate. Consider cost savings as cash inflow, similar to cash inflow from sales. Keep the - sign if it's a negative cash flow number. Round to the whole dollar
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