QUESTION $7$

Water's Edge Resorts is evaluating a project that would require an initial investment in equipment of $$490,000\mathrm{.}00$ and that is expected to last for $4$ years. MACRS depreciation would be used where the depreciation rates in years $1,2,3,4,$ and $5$ are $25\%,45\%,15\%,10,$ and $5\%,$ respectively. For each year of the project, Water's Edge Resorts expects relevant annual revenue associated with the project to be $$654000\mathrm{.}00$ and relevant annual costs associated with the project to be $$474000\mathrm{.}00.$ The tax rate is $49\mathrm{.}00$ percent. What is $(x$ plus $Y)$ if $x$ is the relevant operating cash flow $($OCF$)$ associated with the project expected in year $2$ of the project and $Y$ is the relevant OCF associated with the project expected in year $3$ of the project?

$$127,815\mathrm{.}00($plus or minus $$10)$

$$115,810\mathrm{.}00($plus or minus $$10)$

$$243,625\mathrm{.}00($plus or minus $$10)$

$$327,660\mathrm{.}00($plus or minus $$10)$

None of the above is within $$10$ of the correct answer