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TEA [102]
3 years ago
15

A 4-year project has an annual operating cash flow of $58,500. At the beginning of the project, $4,950 in net working capital wa

s required, which will be recovered at the end of the project. The firm also spent $23,800 on equipment to start the project. This equipment will have a book value of $5,220 at the end of the project, but can be sold for $6,090. The tax rate is 40 percent. What is the Year 4 cash flow
Business
1 answer:
valina [46]3 years ago
3 0

Answer:

Net   Cash flow   in year 4   $46,140<u> </u>

Explanation:

Cash flow represent the amount of cash revenue less out of pocket cash expenditures. Non-cash related items are not included.

Year    4                                               cash flow     ;

                                                                     $

Operating cash flow                               $58,500

Working capital recouped                     4,950

Scrap value                                            6,090    

Tax payable (40%*58500)                      <u>(23400 )</u>

  Net   Cash flow                            <u>      46,140 </u>

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