Clemson software is considering a latest project whose data, Ask an Expert

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Clemson Software is considering a latest project whose data are given below. The needed equipment has a 3-year tax life, after which it will be worthless,and it will be depreciated by the straight-line method over 3 years. Revenues and other operating costs are accepted to be constant over the project's 3-year life. What is the project's Year 1 cash flow?

Equipment cost (depreciable basis) $65,000

Straight-line depreciation rate 33.333%

Sales revenues, each year $60,000

Operating costs (excl. deprec.) $25,000

Tax rate 35.0%

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M9532375

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