Your company is planning to spend $70,000 on a machine to produce a new computer game. Shipping
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Your company is planning to spend $70,000 on a machine to produce a new computer game. Shipping and installation costs of the machine will be $3,000. The machine has an expected life of 3 years, a $29,000 estimated resale value, and falls under the MACRS 5-Year class life. Revenue from the new game is expected to be $32,000 per year, with costs of $17,000 per year. The firm has a tax rate of 30 percent, an opportunity cost of capital of 14 percent, and it expects net working capital to increase by $3,000 at the beginning of the project. What will be the operating cash flow (OCF) for year one of this project?
Related Book For
Finance Applications and Theory
ISBN: 978-0077861681
3rd edition
Authors: Marcia Cornett, Troy Adair
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