Question: QUESTION 4 10 points XYZ is evaluating the Reno project. The project would require an initial investment of $136,000 that would be depreciated to $16,000
QUESTION 4 10 points XYZ is evaluating the Reno project. The project would require an initial investment of $136,000 that would be depreciated to $16,000 over 6 years using straight-line depreciation. The project is expected to have operating cash flows of $41,000 per year forever. XYZ expects the project to have an after-tax terminal value of $326,000 in 3 years. The tax rate is 30%. What is (X+Y)/Z if X is the project's relevant expected cash flow in year 3, Y is the project's relevant expected cash flow in year 4, and Z is the project's relevant expected cash flow in year 2? a. A number less than 6.00 or a number equal to or greater than 10.00 b. A number equal to or greater than 6.00 but less than 7.00 c. A number equal to or greater than 7.00 but less than 8.00 d. A number equal to or greater than 8.00 but less than 9.00 e. A number equal to or greater than 9.00 but less than 10.00
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