Solution-What is the cash flow of the project in year 4

What is the cash flow of the project in year 4

Reference no: EM132442086

ABC, Inc. purchased an equipment at time=0 for $52,504. The shipping and installation costs were $6,270. The equipment is classified as a 5-year MACRS property. The investment in net working capital at time=0 was $7,732 which would be recouped at the end of the project. The project life is four years. At the end of the fourth year, the company will sell the equipment for $13,114. The annual cash flows are $43,345. What is the cash flow of the project in Year 4? That is, solve for CF4. Assume that the tax rate is 16%

The MACRS allowance percentages are as follows, starting with Year 1: 20.00, 32.00, 19.20, 11.52, 11.52, and 5.76 percent.

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

Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box.

Reference no: EM132442086

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What is the cash flow of the project in year 4

Reference no: EM132442086

Reference no: EM132442086

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