Posted by Andy on .
19. Fool Proof Software is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life, and the MACRS rates for such property are 33%, 45%, 15%, and 7% for Years 1 through 4. Revenues and other operating costs are expected to be constant over the project's 10-year life. What is the operating cash flow for Year 1?
Equipment cost (depreciable basis) $65,000
Sales revenues, each year $60,000
Operating costs excl. depr'n $25,000
Tax rate 35.0%