XYZ Company purchases $600,000 of new equipment that will assist the firm to create an additional operating cash flow of $252,600 each year for three years. The equipment will be depreciated straight-line to a zero book value over its 3 year life. Ignore bonus depreciation. At the end of the three years, the equipment will be sold for an estimated 50,000. 

The equipment will require the company to hold a net working capital of :

$23,000 in year 0, 

23,000 in year 1, 

$23000 is year 2,

 $0 in year 3. 

The discount rate is 14 percent and the tax rate is 21 percent. what is the incremental cash flow in year 3?

Answer rating: 100% (QA)

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