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What is the operating cash flow for year 4 of project S that Club Corp should use in its NPV analysis of the project? The tax rate is 30%. During year 4, project 5 is expected to have relevant revenue of $164,000, relevant variable costs of $85,000, and relevant depreciation of $31,000. In addition, Club Corp would have one source of fixed costs associated with project S. Yesterday, Club Corp signed a deal with Lounge Legal to develop a liability control plan. The terms of the deal require Club Corp to pay Lounge Legal either $27,000 in 4 years if project S is pursued or $39,000 in 4 years if projectS is not pursued, Finally, the equipment purchased for the project would be sold in 4 years for an expected after-tax cash flow of $6,000.
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