Question: Pierre Wineries is evaluating a project that would require an initial investment in equipment of 580.000 and that is expected to last for 6 years.

 Pierre Wineries is evaluating a project that would require an initial

Pierre Wineries is evaluating a project that would require an initial investment in equipment of 580.000 and that is expected to last for 6 years. MACRS depreciation would be used where the depreciation rates in years 1. 2. 3. 4, and 5 are 40.04. 25.0%, 15.04, 10.0% and 10.0%, respectively. For each year of the project. Pierre Wineries expects relevant annual revenue associated with the project to be $45,000 and relevant annual costs associated with the project to be $30.000. The tax rate is 50 percent. What is ex plus y) if X is the relevant operating cash flow (OCF) associated with the project expected in year 1 of the project and is the relevant OCF associated with the project expected in year 3 of the project? a. $20.000 (plus or minus 5100) b. $35.000 (plus or minus 5100) C. 537.000 (plus or minus $100) d. 554.000 (plus or minus $100) e. None of the above is within $100 of the correct

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