What is the total cash flow in year eight of project

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Reference no: EM132009133

ABC, Inc is planning the purchase of a new equipment which will cost $21,483. The project is expected to last for 8 years. The equipment will have a book value of $2,049 at the end of Year 8. The increase in net working capital is expected to be $2,268, all of which will be recouped at the end of the project. The project is expected to have annual operating cash flows of $18,936. What is the Total Cash Flow in Year 8 of the project if the equipment can be sold for $5,711 and the tax rate is 25%?

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

Reference no: EM132009133

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