The 2017 balance sheet of Staples, Inc. shows total assets of $8,271 million, operating assets of $6,566 million, operating liab
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Answer:
The Year 4 cash flow is $33,348.
Explanation:
The Year 4 is the last year of the project.
In this year we have:
- Income: +$48,000.
- Working capital recovery: +$3,900
- Equipment sale: +$5,460
- Equipment book value: -$4,380
To calculate the tax, we apply the tax rate to the income and to the sale profit (difference between the market value and the book value of the equipment):
- Tax: -$19,632
Then, we can calculate the Year 4 cash flow: