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What is the annual operating cash flow for a 10 year projectthat has annual sales of 590,000, its variable costs are 80% ofsales and has annual fixed costs of $100,000. The project requiresnew equipment at a cost of 20,000 and an instulation cost of $4,000and a plant that costs $100,000. Depreciation is under the straightline method and the equipment has an estimated life of 10 years andplant estimated life of 30 years. The tax rate is 40% and thediscounting rate is 10%.
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