IDNLearn.com is your go-to platform for finding accurate and reliable answers. Get comprehensive and trustworthy answers to all your questions from our knowledgeable community members.
A firm is planning to start a new project. The firm spent $45,000 on a market study and $30,000 on consulting three months ago. If the firm starts the project, it will spend $600,000 for new machinery, $50,000 for installation, and $20,000 for shipping. The machine will be depreciated via the 5-year MACRS depreciation method (20.00%, 32.00%, 17.20%, 11.50%, 11.50%, and 5.8%, respectively, from Year 1 to Year 6). The expected sales increase from this new project is $450,000 a year, and the expected incremental expenses are $180,000 a year. In order to start this new project, the company has to invest $100,000 in working capital. The marginal tax rate is 34%. What is the incremental cash flow of this project in Year 2? A)$220,013 B)$217,382 C)$102,142 D)$224,107
Sagot :
We are happy to have you as part of our community. Keep asking, answering, and sharing your insights. Together, we can create a valuable knowledge resource. IDNLearn.com is dedicated to providing accurate answers. Thank you for visiting, and see you next time for more solutions.