What is the project year cash flow for arics company

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Question 1: ARICS Company is thinking of a new project with the information shown. The needed equipment has a 3-year tax life, with zero salvage value at the end of the equipment's lifetime, and it will be depreciated by the straight-line method over 3 years; that is equal amount of depreciation per year. Revenues and other operating costs are expected to flow at constant amount over the project's 3-year life. What is the project's Year 1 cash flow?

Equipment cost $65,000

Straight-line depreciation rate 33.333%

Sales revenues, each year $60,000

Operating costs $25,000

Tax rate 35.0%

Reference no: EM132650973

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