Compute the expected net cash flow on the tenth year

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Question - Garfield is considering a 10-year capital investment project with forecasted revenues of $40,000 per year and forecasted cash operating expenses of $29,000 per year. The initial cost of the equipment for the project is $23,000 and Garfield expects to sell the asset for $9,000 at the end of the tenth year. The equipment will be depreciated over 7 years. This project requires a working capital investment of $7,000 at its inception and another $5,000 at the end of Year 5. Assuming a 40% marginal tax rate, compute the expected net cash flow on the tenth year?

Reference no: EM132635516

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