Question: Purple Entertainment is evaluating a 4-year project that would require an initial investment in equipment of $730,000. The equipment would be depreciated to $233,000 over

Purple Entertainment is evaluating a 4-year project that would require an initial investment in equipment of $730,000. The equipment would be depreciated to $233,000 over 7 years using straight-line depreciation. In year 4, the project is expected to have relevant revenue of $336,000 and relevant variable costs of $239,000. In addition, Purple Entertainment would have one source of fixed costs associated with the project. Yesterday, Purple Entertainment signed a deal with Oval Advertising to develop an advertising campaign for the project. The terms of the deal require Purple Entertainment to pay $56,000 to Oval Advertising in 4 years. The tax rate is 20 percent. What is the operating cash flow for year 4 that Purple Entertainment should use in its NPV analysis of the project? Input instructions: Round your answer to the nearest dollar. [ ]doliars

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