Question: (CB CFs) A capital budgeting project will cause EBIT to increase by $42651 per year. The annual depreciation expense is $47092. The firm's tax rate
(CB CFs) A capital budgeting project will cause EBIT to increase by $42651 per year. The annual depreciation expense is $47092. The firm's tax rate is 23%. At the end, the equipment will be sold for its salvage value of $51685; its book value will be $34172 at that time. The initial increase in net working capital of $11668 will be recaptured at the end of the project's life. What is the cash flow in the last year of the project's life, in $? Include both the annual FCF and the terminal CF.
Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
