Question: Fool Proof Software is considering a new project whose data are shown below. The equipment that would be used has a 3 -year tax life,
Fool Proof Software is considering a new project whose data are shown below. The equipment that would be used has a 3 -year tax life, and the allowed depreciation rates for such property are 33.0%,45.0%,15.0%, and 7.0% for Years 1 through 4 . Under the new tax law, the equipment used in the project is eligible for 100% bonus depreciation, so it will be fully depreciated at t=0. Revenues and other operating costs are expected to be constant over the project's 10-year expected life. What is the Year 1 cash flow? a. 565,000 b. 549,713 c. 548,750 d. $53,288 e. 566,900
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