Question: Cerdik Packaging is considering a new project whose data are shown below. The required equipment has a 4-year life, with an estimated salvage value of

Cerdik Packaging is considering a new project whose data are shown below. The required equipment has a 4-year life, with an estimated salvage value of $5,000 and it will be depreciated by the straight-line method over 4 years. Revenues and other operating costs are expected to be constant over the projects 4- year life.

Equipment cost (depreciable basis) $65,000

Sales revenues, each year $60,000

Operating costs (excl. depreciation) $25,000

Tax rate 35.0

What is the projects cash flow from Year 1 to Year 4?

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