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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