Question: Amalgamated Eurythmics (AE) is deciding whether or not it should manufacture dagons spheres to take advantage of a new fad. To get underway, the project

 Amalgamated Eurythmics (AE) is deciding whether or not it should manufacture

Amalgamated Eurythmics (AE) is deciding whether or not it should manufacture dagons spheres to take advantage of a new fad. To get underway, the project would require capital expenditures of $50,000, along with an investment in NWC of $7,250. AE projects sales would be $100,000: $200,000; and $50,000 in years 1, 2, and 3, respectively. The total associated expenses (excluding depreciation and taxes) would be $60,000; $110,000: and $35,000 for years 1, 2and 3, respectively. Depreciation would be 16,667 per year. AE has a marginal tax rate of 35%. What would AE's operating cash flow be in year 1? 31,833 24,583 25,825 27.917 34,958

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