What is the operating cash ?ow for year one of this project

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Problem - Taylor United is considering overhauling its equipment to meet increased demand for its product. The cost of equipment overhaul is $3.90 million, plus $210,174.00 in installation costs. The firm will straight-line depreciate the equipment to zero using a 5-year recovery period. Additional sales from the overhaul should amount to $231,623.00 per year, and additional operating expenses and other costs (excluding depreciation) will amount to 40.00% of the additional sales. The firm has an ordinary tax rate of 35.00%. What is the operating cash ?ow for year 1 of this project?

Reference no: EM132950891

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