Question: EVO, Inc. is evaluating a project that will have a life of four years. The operating cash flow each year is expected to be $47,000.

EVO, Inc. is evaluating a project that will have a life of four years. The operating cash flow each year is expected to be $47,000. There is a need to invest in net working capital at the start of the project in the amount of $3,800. EVO, Inc. will recover this investment in net working capital at the end of the project. EVO also needed to spend $21,500 on equipment in order to get the project started. The book value for this equipment when the project is finished, is estimated to be $4,300. This equipment will be sold at the end of the project for an estimated sales price of $5,400. EVO has a tax rate relevant to this analysis of 34 percent. Calculate the amount of cash flow in year 4 of this project?

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