Eisenhower Communications is trying to estimate cash flows for a proposed project. The following information has been collected on the project: Equipment cost$10,000Working capital investment$2,000Revenue$10,000Operating Expense (excluding depreciation)$6,000Interest expense$2,000Tax Rate40%Salvage value$4,000Project lifespan4 years YearDepreciation Rate133%245%315%47%32.)The cash flow for the end of the last year of the project (year 4) is: Question 32 options: $2,680 $7,080 $6,680 $5,080

Working of the cash flow for the last year of the project is shown: Hence, option 1 is correct.…

Answered: Eisenhower Communications is trying to…

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter26: Capital Investment Analysis

Section: Chapter Questions

Problem 4MAD

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Eisenhower Communications is trying to estimate cash flows for a proposed project. The following information has been collected on the project:

Equipment cost	$10,000
Working capital investment	$2,000
Revenue	$10,000
Operating Expense (excluding depreciation)	$6,000
Interest expense	$2,000
Tax Rate	40%
Salvage value	$4,000
Project lifespan	4 years

Year	Depreciation Rate
1	33%
2	45%
3	15%
4	7%

32.)

The cash flow for the end of the last year of the project (year 4) is:

Question 32 options:

	$2,680
	$7,080
	$6,680
	$5,080

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