Question: Whitestone Products is considering a new project whose data are shown below. The required equipment has a 4 - year tax life, and the accelerated

Whitestone Products is considering a new project whose data are shown below. The required equipment has a 4-year tax life, and the accelerated rates for such property are 33.33%,44.45%,14.81%, and 7.41% for Years 1 through 4. Revenues and other operating costs are expected to be constant over the project's 10-year expected operating life. What is the project's Year 5 cash flow?
Equipment cost (depreciable basis)
$50,000
Sales revenues, each year
$42,500
Operating costs (excl. deprec.)
$25,000
Tax rate
40.0%
a.
$17,500
b.
$11,375
c.
$14,875
d.
$14,500
e.
$10,500

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