Make an annual income statement for the four years

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Question - The Courtyard Hotel at University of Notre Dame is planning to build an outdoor fitness pavilion. The total cost of all the equipment will be $7.5million. They will use the MACRS to depreciate the equipment at the following rates: 20%, 32%, 29.2%, and 18.80%. This will be a 4-year project and will have no salvage value. Below is the anticipated annual revenues and expenses (in $000s):

Revenues $13,000

Cost of Sales $5,500

Administrative expenses $2,800

Tax expense (21%)

Required - Make an annual income statement for the 4 years and calculate the operating cash flows for each of the 4 years.

Reference no: EM132942865

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