Your company, LBNC Inc., is considering a new project whose data are shown below.The required equipment has a

3-year tax life, and the accelerated rates for such property are 33%, 45%, 15%, and 7% 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 4 cash flow?

Equipment cost (depreciable basis)$90,000

Sales revenues, each year$42,500

Operating costs (excl. deprec.)$25,000

Tax rate35.0%

A.

$5,850

B.

$8,790

C.

$13,580

D.

$7,750