Question: Orange lake technology is evaluating a 7 year project that would require an initial investment in equipment of $ 6 6 0 0 0 0

Orange lake technology is evaluating a 7 year project that would require an initial investment in equipment of $660000. Accelerated depreciation would be used where the depreciation rates in year 1,2,3,4 would be 40%,35%,15%, and 10% respectively. For each year of the project, Orange lake technology expects relevant revenue associated with the project to be $342000 per year. Relevant cost associated with the project are expected to be $102000 in years 1 and 2, and $243000 in years 3 and later. The tax rate is 10 percent. Round your answer to the nearest dollar. What is the relevant operating cash flow associated with the project expected for year 1 and year 4?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!