Question: Please show in Excel Clemson Software is considering a new project whose data are shown below. The required equipment has a 3-year tax life, after
Clemson Software is considering a new project whose data are shown below. The required equipment has a 3-year tax life, after which it will be worthless, and it will be depreciated by the straight-line method over 3 years. Revenues and other operating costs are expected to be constant over the project's 3-year life. What is the project's Year 2 cash flow? Equipment cost (depreciable basis): $65,000 Straight-line depreciation rate: 33.333% Sales revenues, each year: $60,000 Operating costs (excl. depreciation): $25,000 Tax rate: 35.0% Sales Costs Depreciation Tax Rate OCF
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