Solution-What will be the net cash flow for year one of

What will be the net cash flow for year one of project

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Your company has spent $330,000 on research to develop a new computer game. The firm is planning to spend $53,000 on a machine to produce the new game. Shipping and installation costs of the machine will be capitalized and depreciated; they total $6,300. The machine has an expected life of 5 years, a $38,000 estimated resale value, and falls under the MACRS 7-Year class life. Revenue from the new game is expected to be $430,000 per year, with costs of $230,000 per year. The firm has a tax rate of 30 percent, an opportunity cost of capital of 15 percent, and it expects net working capital to increase by $63,000 at the beginning of the project. What will be the net cash flow for year one of this project?

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What will be the net cash flow for year one of project

Reference no: EM132499241

Reference no: EM132499241

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