ABC, Inc. is considering a new project requiring a $210,000 initial investment in equipment having a useful life of 3 years with zero expected salvage value. The investment will produce $160,000 in annual revenues and $120,000 in annual costs. Assume a tax rate of 30% and straight-line depreciation. What is the operating cash flow per year? O $19,000 O $49,000 O $77,000 O $61,000 O $98,000

ABC, Inc. is considering a new project requiring a $210,000 initial investment in equipment having a useful life of 3 years with zero expected salvage value. The investment will produce $160,000 in annual revenues and $120,000 in annual costs. Assume a tax rate of 30% and straight-line depreciation. What is the operating cash flow per year? O $19,000 O $49,000 O $77,000 O $61,000 O $98,000

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section10.A: Mutually Exclusive Investments Having Unequal Lives

Problem 2P

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