Revenues and other operating costs are expected to be

Reference no: EM13477024

Clemson Software is considering a new project whose data are shown below. The required equipment has a 3-year tax life, after which it will be worthless, and it will be depreciated by the straight-line method over 3 years. Revenues and other operating costs are expected to be constant over the project's 3-year life. What is the project's Year 1 cash flow?

Equipment cost (depreciable basis)	$65,000
Straight-line depreciation rate	33.333%
Sales revenues, each year	$60,000
Operating costs (excl. deprec.)	$25,000
Tax rate	35.0%

a. $28,115

b. $28,836

c. $29,575

d. $30,333

e. $31,092

Reference no: EM13477024

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