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Marina86 [1]
3 years ago
13

A 4-year project has an annual operating cash flow of $53,500. At the beginning of the project, $4,450 in net working capital wa

s required, which will be recovered at the end of the project. The firm also spent $22,800 on equipment to start the project. This equipment will have a book value of $4,820 at the end of the project, but can be sold for $5,790. The tax rate is 35 percent. What is the Year 4 cash flow?
A. $61,714
B. $54,501
C. $20,633
D. $64,080
E. $63,401
Business
1 answer:
Angelina_Jolie [31]3 years ago
3 0

Answer:

E. $63,401

Explanation:

gain on disposal = salvage value of plant - book value on date of sale

                            = $5,790 - $4,820

                            = $970

tax on disposal = $970*35%

                          = $339.50

after tax salvage value = $5,790 - $339.50

                                       = $5,450.50

total cash flow in 4 years

= annual operating cash flow + net working capital + after tax salvage value

= $53,500 + $4,450 + $5,450.50

= $63,401

Therefore, The Year 4 cash flow is $63,401.

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3 0
1 year ago
The economic indicator that reflects activity of u. s. entities without regard to where the activity takes place is?
USPshnik [31]

The economic indicator that reflects the activity of the U.S. entitled without regard to where the activity takes place is GNP.

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4 0
11 months ago
Suppose the market for corn is a purely competitive, constant-cost industry that is in long-run equilibrium. now assume that an
sergij07 [2.7K]
After all resulting adjustments have been completed, the new equilibrium price will less than the initial price and output. The same will happen to the industry output. In each situation in which <span>an increase in product demand occurs in a decreasing-cost industry the result is: </span>the new long-run equilibrium price is lower than the original long-run equilibrium price.
5 0
2 years ago
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mario62 [17]

Answer:

Net income increase - $4,890

Explanation:

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Answer: is correct

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