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A firm is considering the purchase of a machine which would represent an investment of $26 million, and would be depreciated in a straightline basis over 4 years. Sales are expected to be $14 million per year, and operating costs 44% of sales. The company is currently paying $2 million in interest per year, has a tax rate of 40%, and a WACC of 10%. What is the company’s free cash flow for year 1 of this project?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92359919

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