Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Ef 24.

A 7-year project is expected to provide annual sales of $233,000 with costs of $99,000. The equipment necessary for the
project will cost $375,000 and will be depreciated on a straight-line method over the life of the project. You feel that both sales
and costs are accurate to +/-10 percent. The tax rate is 21 percent. What is the annual operating cash flow for the worst-case
scenario?
Multiple Choice
$127,430
$54,030
$77.270
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Transcribed Image Text:A 7-year project is expected to provide annual sales of $233,000 with costs of $99,000. The equipment necessary for the project will cost $375,000 and will be depreciated on a straight-line method over the life of the project. You feel that both sales and costs are accurate to +/-10 percent. The tax rate is 21 percent. What is the annual operating cash flow for the worst-case scenario? Multiple Choice $127,430 $54,030 $77.270
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