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 $52,000.
EVO, Inc. is evaluating a project that will have a life of four years. The operating cash flow each year is expected to be $52,000. There is a need to invest in net working capital at the start of the project in the amount of $4,300. EVO, Inc. will recover this investment in net working capital at the end of the project. EVO also needed to spend $22,500 on equipment in order to get the project started. The book value for this equipment when the project is finished, is estimated to be $4,700. This equipment will be sold at the end of the project for an estimated sales price of $5,700. EVO has a tax rate relevant to this analysis of 35 percent. Calculate the amount of cash flow in year 4 of this project?
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