Consider the following financial data for an investment project:• Required capital investment at n = 0: $ 100,000• Project service life: 10 years• Salvage value at n = 10: $15,000• Annual revenue: $150.000• Annual O&M costs (not including depreciation): $50.000• Depreciation method for tax purpose: seven-year MACRS• In come tax rate: 40%.Determine the project cash flow at the end of year 10.(a) $69.000(b) $73.000(c) $66.000(d) $67.000
Consider the following financial data for an investment project:• Required capital investment at n = 0: $ 100,000• Project service life: 10 years• Salvage value at n = 10: $15,000• Annual revenue: $150.000• Annual O&M costs (not including depreciation): $50.000• Depreciation method for tax purpose: seven-year MACRS• In come tax rate: 40%.Determine the project cash flow at the end of year 10.(a) $69.000(b) $73.000(c) $66.000(d) $67.000
Chapter11: Capital Budgeting And Risk
Section: Chapter Questions
Problem 15P
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Consider the following financial data for an investment project:
• Required capital investment at n = 0: $ 100,000
• Project service life: 10 years
• Salvage value at n = 10: $15,000
• Annual revenue: $150.000
• Annual O&M costs (not including
• Depreciation method for tax purpose: seven-year MACRS
• In come tax rate: 40%.
Determine the project cash flow at the end of year 10.
(a) $69.000
(b) $73.000
(c) $66.000
(d) $67.000
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