Fitzgerald Computers is considering a new project whose data are shown below. The required equipment...
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Fitzgerald Computers is considering a new project whose data are shown below. The required equipment has a 3-year tax life, after which it will have zero book value, and it will be depreciated by the straight-line method over 3 years. Revenues and other operating costs are expected to be constant over the project's 5-year life. What is the project's Year 4 cash flow? Equipment cost (depreciable basis) $65,000 Straight-line depreciation rate 33.33% Sales revenues, each year $60,000 Operating costs (excl. deprec.) $25,000 Tax rate 40.0% a. $21,000 b. $28,438 c. $30,333 d. $22,750 e. $27,500
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