Question: Henry's Hardware Store is considering a new project that will last for 3 years and whose data are shown below. The company would purchase equipment
Henry's Hardware Store is considering a new project that will last for 3 years and whose data are shown below. The company would purchase equipment at $200,000 plus $15,000 for installation costs. The equipment is classified in the 3-year class and will be depreciated under MACRS (The percentages are 33.33%, 44.45%, 14.81%, and 7.41%, respectively). . The company believes that at the end of the 3rd year, the equipment can be sold for $25,000. Net working capital will increase immediately by $30,000 and be recovered at the end of the project Sales . Other operating costs Tax rate . $200,000 $ 70,000 35% What are the annual operating cash flows for year 2? $199,068.50 $125,830.83 $134,198.63 $38,631.13
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