Question: Whitestone Products is considering a new project whose data are shown below. The required equipment has a 3-year tax life, and the MACRS rates for

Whitestone Products is considering a new project whose data are shown below. The required equipment has a 3-year tax life, and the MACRS rates for such property are 33.33%, 44.45%, 14.81%, and 7.41% for Year 1 through Year 4. Revenues and other operating costs are expected to be constant over the projects 10-year expected operating life. What is the projects Year 4 cash flow?

Equipment cost (depreciable basis)

$50,000

Sales revenues, each year

$40,212

Operating costs (excluding depreciation)

$20,222

Tax rate

32%

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