What is amount of the cash flow in the project final year

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The Mill Wheel is considering a 3-year project that will require $289,400 for fixed assets, $36,700 for inventory and $27,800 for accounts receivable. Short-term debt is expected to increase by $16,500. The fixed assets will be depreciated straight-line to a zero book value over 5 years. At the end of the project, the fixed assets can be sold for 20 percent of their original cost and the net working capital will return to its original level. The project is expected to generate annual sales of $275,000 and costs of $198,000. The tax rate is 34 percent and the required rate of return is 16 percent. What is the amount of the cash flow in the project’s final year?

Reference no: EM131529998

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