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Operating cash flow needed

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Abc corporation plans to begin a new project that will require an initial outlay of $ 10 million. This cost will include construction of a plant and the purchase of equipment (which both will be straight-line depreciated over their 5 year life). The corporation tax rate is 35% and their appropriate discount rate is 8%. The firm is expecting to incur fixed costs of $850000 each year over the 5 year life of the project. What will be the operating cash flow needed each year for the project to breakeven project?

Reference no: EM132719422

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