Question: XYZ is evaluating the Reno project. The project would require an initial investment of $140,000 that would be depreciated to $16,100 over 6 years using
XYZ is evaluating the Reno project. The project would require an initial investment of $140,000 that would be depreciated to $16,100 over 6 years using straight -fine depreciation. The project is expected to have operating cash flows of $51,100 per year forever. XYZ expects the project to have an after-tax terminal value of $356,000 in 3 years. The tax rate is 30%. What is (X+/Z if X is the project's relevant expected cash flow in year 3,Y is the project's relevant expected cash flow in year 4 , and Z is the project's relevant expected cash flow in year 2 ? A number equal to or greater than 7.47 but less than 9.49 A number equal to or greater than 9.49 but less than 11.79 A number equal to or greater than 11.79 but less than 13.45 A number equal to or greater than 13.45 but less than 15.25 A number less than 7.47 or a rate greater than 15.25
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