10s.2 Consider the following financial data for an investment project: · Required capital investment at n = 0 : $100,000 • Project service life: 10 years • Salvage value at n = 10 : $15,000 · Annual revenue: $150,000 · Annual O&M costs (not including depreciation): $50,000 • Depreciation method for tax purpose: seven-year MACRS • Income tax rate: 25%. Determine the project cash flow at the end of year 10. a. $86,250 b. $73,000 c. $75,000 d. $67,000
10s.2 Consider the following financial data for an investment project: · Required capital investment at n = 0 : $100,000 • Project service life: 10 years • Salvage value at n = 10 : $15,000 · Annual revenue: $150,000 · Annual O&M costs (not including depreciation): $50,000 • Depreciation method for tax purpose: seven-year MACRS • Income tax rate: 25%. Determine the project cash flow at the end of year 10. a. $86,250 b. $73,000 c. $75,000 d. $67,000
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter12: Capital Investment Analysis
Section: Chapter Questions
Problem 5BE
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