Question: You estimate that if a new 4D computer graphic display product is launched by your firm, revenues will increase by $3,053 in the first year
You estimate that if a new 4D computer graphic display product is launched by your firm, revenues will increase by $3,053 in the first year and 10% each year for the next 3 years. Expenses will be 50% of revenues. Depreciation is computed using MACRS for an asset with a 3-year life and a basis of $7,236. The tax rate is 40%. Compute the second years' annual cash flows. Round to a whole number. MACRS Depreciation Rates Year 3 year 1 33.33% 2 44.45% 3,216
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