Question: Lendrum Inc. is considering a new project whose data are shown below. The equipment has an economic life of 3 years, and is in CCA
Lendrum Inc. is considering a new project whose data are shown below. The equipment has an economic life of 3 years, and is in CCA class 10 (30%). The half-year rule applies. Revenues and cash operating costs are expected to be constant over the projects 3-year life. What is the net operating cash flow for Year 1?
| Equipment cost | $80,000 | ||||||
| Annual sales revenues | $60,000 | ||||||
| Annual cash operating costs | $35,000 | ||||||
| Tax rate | 25.0% | ||||||
| a. | $21,750 | |
| b. | $25,000 | |
| c. | $13,000 | |
| d. | $9,7 |
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