Question: Your company, RMU Inc., is considering a new project whose data are shown below. Under the new tax law, the equipment used in the project

Your company, RMU Inc., is considering a new project whose data are shown below. Under the new tax law, the equipment used in the project is eligible for 100% bonus depreciation, so it will be fully depreciated at t = 0. What is the project's Year 1 cash flow?

Sales revenues

$26,750
Operating costs

$12,000
Tax rate

25.0%
a.

$12,782
b.

$1,063
c.

$4,345
d.

$9,929
e.

$2,350

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