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Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $609,957. The fixed asset will be depreciated straight-line to 58,651 over its 3-year tax life, after which time it will have a market value of $83,523. The project requires an initial investment in net working capital of $70,975. The project is estimated to generate $248,086 in annual sales, with costs of $149,396. The tax rate is 0.34 and the required return on the project is 0.14. What is the operating cash flow in years 1 through 3? (Make sure you enter the number with the appropriate +/- sign)

Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $609,957. The fixed asset will be depreciated straight-line to 58,651 over its 3-year tax life, after which time it will have a market value of $83,523. The project requires an initial investment in net working capital of $70,975. The project is estimated to generate $248,086 in annual sales, with costs of $149,396. The tax rate is 0.34 and the required return on the project is 0.14. What is the operating cash flow in years 1 through 3? (Make sure you enter the number with the appropriate +/- sign)

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 2PB: Markoff Products is considering two competing projects, but only one will be selected. Project A...
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Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $609,957. The fixed asset will be depreciated straight-line to 58,651 over its 3-year tax life, after which time it will have a market value of $83,523. The project requires an initial investment in net working capital of $70,975. The project is estimated to generate $248,086 in annual sales, with costs of $149,396. The tax rate is 0.34 and the required return on the project is 0.14. What is the operating cash flow in years 1 through 3? (Make sure you enter the number with the appropriate +/- sign)

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