Question

Colors and more is considering replacing the equipment it uses to produce crayons. the equipment would cost $1.37 million, have a 12-year life, and lower manufacturing costs by an estimated $310,000 a year. the equipment will be depreciated over 12 years using straight-line depreciation to a book value of zero. the required rate of return is 15 percent and the tax rate is 35 percent. what is the annual operating cash flow?

Answer 1

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