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Discuss what is the total cash flow

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ABC, Inc is planning the purchase of a new equipment which will cost $26,007. The project is expected to last for 9 years. The equipment will have a book value of $3,661 at the end of Year 9. The increase in net working capital is expected to be $2,741, all of which will be recouped at the end of the project. The project is expected to have annual operating cash flows of $13,857.What is the Total Cash Flow in Year 9 of the project if the equipment can be sold for $6,341 and the tax rate is 37%?

Note: In the last year of the project, the Total Cash Flow = Operating Cash Flow + Terminal Cash Flow

 

Reference no: EM131768696

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