What is the free cash flow of the project in year

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Question - The Eurosouth approved a 8-year project that requires an initial investment of $24 million for the equipment and working capital of $5 million. The marginal tax rate for Eurosouth is 20%. The project will generate the following ?gures for each year during the life of the project: Sales of $70 million, Operating Expenses of $2 million and Depreciation and Amortization charges of $3 million. The firm uses straight-line depreciation and assumes that the equipment will fully depreciate at the end of the project. If the market value of the equipment is $1 million at the end of the project, what is the Free Cash Flow of the project in year 8?

Reference no: EM133166151

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